Bhopal Position Report 2008

Overview

BHEL, BHOPAL Application Document –CII EXIM Bank Award for Business Excellence - 2008 Page O - 1

PRODUCT MAJOR CUSTOMERS Contribution in turnover

Major Competitors Competitive Advantages

Traction Machines Indian Railways, (ICF, DCW, DLW, DMW, CLW, RCF, etc) 23%

Siemens, Bombardier, CGL

Established Player, New Product development, 85 % Market Share

Electrical Machines (Motors)

M/S NTPC, Ingersoll Rand, Triveni Engineering Ltd, Tata Steel, SEBs, IOCL, etc, all leading cement manufacturers, Refineries.

17%

CGL, ABB, TDPS, Dongfang, WEG, ILGIN

Quality, Market share-71 %, Customer Preferred Product-Bench Mark

Switchgear , Control equipment and rectifiers

SEBs, Indian Railways, RPL, APCPDCL, IOCL, APGENCO, RRVUNL, UPRVUNL etc, all utilities.

17%

Switchgear-Siemens, ABB, L & T, Areva Control Equipment & Rectifier- CGL, Bombardier, Nelco, Alstom, ABB

Design & Quality, Customer Preferred Product-Bench marked. OEM of oil rigs Market share Switchhgear-22 %, Control Equipment & Rectifier 40%,

Transformers M/S NTPC, PGCIL, NPC, NHPC, SEBs, DVC, PPC GREECE, Zesco Zambia, TNB Malaysia etc, all utilities

15%

ABB, Areva, CGL, Siemens

Technology leader in India, Supplied over 4100 transformers totalling 2,65,000 MVA, 45 % Market Share

Hydro Equipment (Turbine & Generator)

M/S NHPC, NTPC, NVDA, Sardar Sarovar, Kosti Sudan, Salma afganistan, NEEPCO, SEBs, HEG,TALA, APGENCO etc

12%

VA TECH, Alstom, Siemens Voith

Low Conversion Cost, Modern Hydro Laboratory, 79 % Market Share

Others- Thermal equipment DG Sets, BOP, Feeders etc

SEBs, Railways, NTPC Inhouse Products, etc

16%

Tie Up with Wartsila for DG sets, Inhouse facility for fabrication and feeders

Fig. O-1: Product Profile & Major Customers

BHARAT HEAVY ELECTRICALS LIMITED, BHOPAL

Organisational Profile:

BHEL, Bhopal, heralded the beginning of heavy electrical industry in India. The Bhopal plant of BHEL started in collaboration with M/s AEI, U.K and was registered as Heavy Electricals (India) Limited, HE(I)L on 29th August 1956. Later it merged with Bharat Heavy Electricals Limited (BHEL) on 1st January 1974.

BHEL with its corporate office at New Delhi caters to core sectors of the Indian economy viz. Power Generation and Transmission, Industry, Transportation, Renewable Energy, Defence etc. The wide network of BHEL‟s 14 manufacturing divisions, 4 Power Sector regional centres, 8 Service Centres, 18 RODs and number of sites enable the company to promptly serve its customers. Human Resource Planning, Finance, Marketing, Erection and Commissioning are the responsibilities of respective corporate functions. International Operations, Power Sector marketing, Industry Sector and Regional Operation divisions (RODs) cater to marketing needs while Erection and Commissioning of Power project sites are accomplished by respective Power Sector groups.

BHEL Bhopal designs and manufactures equipment for power, industry and transportation sector. BHEL, Bhopal delivers a wide spectrum of products and is a leader in Indian market in the operating segments. A profile of major products and customers is as below (Fig. O-1).

BHEL has been using five year Strategic Plans for planning its growth and setting of objectives since mid 70s. Vision, Mission and Values (Fig. O-2) were first identified in 1996 workshop and are reviewed in top management workshops every five years. Strategic Plan: 2007-2012 has been prepared in 2006 and rolled out in 2007. Strategic plans at Unit level are prepared to work out the corporate strategic plans and there after fine tuned to align with the corporate strategic plan. Unit level

top management workshops – “Manthan” are held annually to identify the key issues and challenges.

In line with the company‟s vision, polestar statements for the unit and products/ functions have been formulated in the 2007 top management workshop.

Overview


VISION

A World–Class Engineering Enterprise committed to Enhancing Stakeholder value.

VALUES

Zeal to Excel and Zest for Change Integrity and Fairness in all Matters Respect for Dignity and Potential of Individuals Strict Adherence to Commitments Ensure Speed of Response Foster Learning Creativity and Team-work Loyalty and Pride in the Company

MISSION

To be an Indian Multinational Engineering Enterprise providing Total Business Solutions through Quality Products, Systems and Services in the fields of Energy, Industry, Transportation, Infrastructure and other potential areas.

POLE STAR STATEMENT

To be a leading and creditable supplier of products and services ensuring adequate returns for growth in line with company’s vision & mission

Fig. O-2: Vision, Mission, Values & Pole Star Statement

The top leadership team - Chairman and Managing Director and Directors provide direction to the company‟s growth strategies which emerge from reviews of business environment and deliberations in Management Committee Meetings (MCM). Executive Director(ED) - Head of BHEL Bhopal unit - is a member of Management Committee. The policies finalised at corporate level are cascaded down to unit level. The organisational interfaces are depicted in Fig. O-3 Growth (CAGR above 20%) is the biggest challenge for the unit which led to adoption of Daily Works Management (DWM) by ED and this has facilitated in exceeding targets. DWM has also facilitated uniform quarterly production performance (Fig. 9.2b). ED designed his visual dashboard which facilitated online monitoring of important parameters on real time basis. CRISP boards are displayed in work areas for communication of plans, achievements and strategic initiatives. These initiatives facilitated more than 20% growth on all important financial and engineering parameters i.e. Turnover - 22%, Value Added - 21%, PBT - 25%, EVA -30%, Customer Collections - 29%, Cash Receipts - 29%, Net Flow - 73%, Order Receipts - 54%, R & D Expenditure -106%, Patents - 88%, Capital Expenditure - 61% etc.

Fig. O-3: Organisational Interface

PS- Region’s Sites

CMTD Finance HR P&D

Power

Sector

- BAP - EDN - Jhansi

Industry Sector

International Operations

Po

licy &

Str

ate

gy

Quality

Ord

er

bookin

g/

Appro

vals

Customer

Project Sites

Sister Units Key Vendors

Feedback

ROD

SSBG

A

B

C

Materials

BHEL

Bhopal Supply Chain

Supply

Chain

Feedback

Corporate Office

Overview


Executives (E1-E8) Supervisors Others Total

1295 1272 5092 7659

Fig. O-4: Manpower Position as on June 2008

Grade Engg. Grad.

PG/Doctrate Dip. ITI Others Total

Exec. 694 239 174 5 183 1295

Super. 6 102 290 640 234 1272

Others 5 171 225 3040 1651 5092

Total 705 512 689 3685 2068 7659

Fig. O-5: Educational Qualification of Employees

Organisation structure at BHEL, Bhopal has been designed product and function wise for a speedy response to the needs of both external and internal customers respectively. The present organisation structure is illustrated in Fig. O-6. The profile of the employee base and their educational profile are illustrated below respectively (Fig. O-4, Fig. O-5). As a strategic decision all core activities are manned by regular employees and non core activities are being gradually outsourced through work contracts/ sub-contracting. The core strengths of the organisation are engineering and manufacturing technology.

In line with company‟s vision, 253 full time dedicated design engineers are involved in the process of product development. BHEL‟s products are technology intensive and almost all the products are specially engineered to customer requirements. Product technology is being continuously upgraded through inhouse developments, technology collaborations, ToT, joint developments etc. The in-house development is facilitated through PIR mechanism supported by collaborative projects with leading educational institutes. Excellence in engineering is reflected through continuous thrust on R&D Expenditure, Commercialisation and protection of intellectual rights through patents & copyrights.

The key requirements of various customers and market segment are captured at product level by respective business sectors. Product Committee and Technical Committee of each product are the apex bodies that analyse the market scenario, emerging technologies, technology gaps and decide upon the specific product development needs. The products are directly delivered to customers and there are no distributors/ dealers for the same. Surveys conducted by independent Professional bodies capture Customer perception and provide insights into opportunities for improvement. Management Review meetings facilitate assessment of quality parameters and trigger system improvements.

BHEL, Bhopal values the role of vendors in growth and considers them as partners in the business as materials constitute approximately 50% of shop turnover. BHEL, Bhopal has a strong base of more than 2500 vendors who are registered after a comprehensive assessment and are developed regularly through Vendor Performance Rating System. A B2B Portal ensures online availability of data such as Enquiries, Supply and Payment status etc. for vendors. The major input material is Steel, copper, insulations, Castings and forgings.

In line with government‟s vision of Power for all by 2012, BHEL, Bhopal is positioning itself for meeting the growing demand. Accordingly, Capacity and Capability Augmentation has emerged as one of the critical success factors for the unit.

BHEL Bhopal certified to ISO: 9001, ISO 14001 and OHSAS 18001, is moving towards excellence by adopting TQM as per EFQM/ CII model of Business Excellence. Movement towards Business Excellence, MBE was initiated on a pilot scale in two product areas namely Electrical Machines and Transformers in 1995. The movement now encompasses all products since 1998. The Top Management formulates the Excellence initiatives and identifies the Critical Success Factors. CSFs for the year 2007-08 have been uniform production, cost reduction, timely availability of skilled manpower, bridging technology gaps and capacity enhancement.

A number of initiatives are being taken on continuous basis for fulfilment of organisation‟s „Vision‟. Some of the major initiatives taken over last five years include Balanced Score Card, Performance management System (e-MAP), Six Sigma, Design to Cost (DTC), Lean management, Daily works management (DWM), Capacity enhancement etc. An organisation wide repositioning exercise facilitated by M/S Mckinsey was undertaken in 2004 and the recommendations implemented.

Overview


„Design to Cost‟ (DTC) strategy identified by Top management as a strategic cost reduction exercise had been piloted in Transformer product of BHEL Bhopal with McKinsey and further extended to Traction and Electrical Machines. LEAN has been introduced in Traction and Switchgear product groups. A diagnostic study has been completed in hydro product group and plans drawn for undertaking LEAN. BHEL Bhopal has also adopted Six Sigma methodology with Indian Statistical Institute. The concept of MOU with Corporate Office was replaced by Balanced Score Card (BSC) in 2003-04. BSC is now a strategic tool for policy deployment through e-MAP (Moving Ahead through Performance). The introduction of e-MAP is a strategic HR intervention through focused alignment of individual efforts with that of the department, unit and company as a whole. The initiatives, have led to improvement in business results, increased satisfaction level and morale of employees, share holders and customers. The sustained efforts have also brought laurels in the form of award of “CII EXIM Strong Commitment towards Excellence” in 2003 and “CII EXIM- Significant Achievement towards business excellence” in 2004, 2006 and 2007.

BHEL, Bhopal‟s Laboratories are accredited by NABL to ISO 17025. The Hydro Laboratory, Ultra High Voltage laboratory and Centre for Electric Transportation are the only laboratories of their kind in the entire Asian region. The unit has in-house Feeder and Fabrication Shops to cater to requirements of Tooling, Coils, Laminations, Castings and fabrication work.

Data on various parameters viz. business, personnel etc. is shared across the unit through Intranet and across the organisation (Corporate Office, all major units and regions) through Virtual Private Network (VPN). ISMS certification has been obtained for standard ISO/IEC 27001:2005. BHEL, Bhopal believes in participative management and has three tier participative fora at workmen level. Executives and supervisors are represented through respective associations. Employee‟s perception is regularly collected which forms the basis for formulating and implementing improvement plans. A number of initiatives such as Reward Scheme 2008, IPR Incentive scheme-2008, Revised Variable Plant performance Bonus and Special Incentives payments have been introduced as a result of feedback. As a sequel, the motivation and satisfaction level have improved over the years, which is also reflected in the dipstick surveys. BHEL, has a defined policy for CSR with 0.2% of PAT being earmarked for the purpose. In line with this policy BHEL, Bhopal takes up Environmental Improvement Projects every year. Surveys provide society‟s perception of the company operations and the satisfaction level is of the highest order. BHEL, Bhopal is committed to continuously make its customers successful and to realise organisation‟s Vision and Mission.

Shri R.K.Singh - Executive Director

Product Managers Functional Managers

Shri M.K. Dube GM (Hydro) Shri Prabhat Kumar GM (P &D & BEX)

Shri S. Lomash GM (TPTN & CET) Shri M.C. Prasad GM (HR)

Shri R. Krishnan GM (EM ) Dr. N.C. Agarwal CMS

Shri A.K. Dave GM (TCB) Shri RW Chitale GM (MM)

Shri SK Seth GM (Thermal) Shri SU Quidwai GM (EMT)

Shri CK Shrikhande GM (SCR) Shri MK Shakya GM (TR-NB)

Shri R K Dikshit GM (CI)

Functional Managers Shri GD Verma GM (Feeders & WEX)

Shri C.K. Pani GM (IT & PDX) Shri RR Yadav GM (F)

Shri R.K. Bhasin GM (FBM) Shri U Chatterjee GM (Q)

Shri Din Dayal GM (CDC, Comm. Cord & CMG)

TPTN & CET: Transportation and Centre for Electric Transportation, EM: Electrical Machines, , TCB: Transformer, Capacitor & Bushing, SCR: Switchgear, Controlgear and Rectifier, IT : Information technology, PDX : Projects division, FBM: Fabrication, CDC : Central Despatch Cell, Comm. Cord. : Commercial Coordination, CMG: Contract Management Group, P&D: Planning & Development, BEX :Business Excellence, HR: Human Resource, CMS: Chief Med. Services, MM: Materials Management, EMT: Electrical Maintenance, TR-NB: Transformer New Block, WEX: Works Engineering & Services, F: Finance, Q: Quality

Fig. O-6: Organisation Structure (Unit Level)

Unit BSC Capital Investment Plan

Strategic Divisional Plan

Corporate Strategic Plan

Leadership

BHEL, BHOPAL Application Document –CII EXIM Bank Award for Business Excellence - 2008 Page 1 - 1

To be a leading and creditable supplier of products and services ensuring adequate returns for growth in line with company’s Vision & Mission. -Unit’s Pole Star Statement

“Kadam Kadam Milana Hai Grahak Safal Banana Hai.” - BHEL,Bhopal’s Slogan “Marching Towards Business Excellence” -Earlier Slogan

Fig. 1.1: Unit’s Pole Star Statement and Slogan

1. LEADERSHIP

1a. Leaders develop the mission, vision, values and ethics and are role models of a culture of excellence:

Executive Director and Top Management of the Company actively understand and analyze the drivers for the business growth and set the direction and behavioral norms for the organisation for sustainable success year after year. Vision, Mission and Values (VMV-Fig. O.2) for the corporation are developed and reviewed at corporate level once in five years. VMV were last revisited and reaffirmed in corporate level top management workshop (TMW) held at “Ananda” on 19th-20th May 2006. ED BHEL, Bhopal participates and represents the unit in these Top Management Workshops. Formulation of VMV is done through a preparatory exercise where a cross-section of leaders interacts with employees at all levels.

At BHEL, Bhopal, unit level and group level workshops are held annually. ED leads the Top Management Workshop (TMW) also known as „Manthan‟ at unit level while GMs lead the same at group level. ED, GMs and Business Excellence (BE) leaders and Senior Executives deliberate upon strategic issues in TMW (Fig. 2.9). The outputs that emerge from group level workshops form the basis of deliberations in unit level workshops. The long term and short term CSFs are finalised by top management (Cr. 2c). „Manthan‟ facilitates identification of CSFs for the year e.g. In the TMW chaired by ED, held on 7-8 June‟08 and last year‟s workshop facilitated by the then Director(HR), held on 2nd -3rd May‟07, the unit level CSFs and CSF champions (GMs), were identified for 2008-09 and 2007-08 respectively. Last year, the leadership felt a need of developing a guiding statement specific to the unit and emerging from corporate vision. This gave birth to concept of a Polestar Statement (Fig. 1.1). Modus operandi for development of group-wise Polestar statements was also deliberated and finalized last year in the workshop and subsequently polestar statements for all product and function group were finalised.

During Manthan-2007 deliberations, it emerged that team work and customer success are the stepping stones for realization of Vision. This paradigm shift of leadership philosophy culminated in shifting the focus from customer satisfaction to customer success and employee satisfaction to passionate employees. This led to revision of earlier excellence slogan (Fig. 1.1) for effective and emotional involvement of all employees for adopting and exhibiting new philosophy.

ED and GMs deliberated and finalized on the unit‟s definition of „World class‟ which the unit is striving to attain (Fig. 1.2). It was decided to include „selected market‟ in the concept of world class to emphasise the market segment applicable for each product. TMW facilitated by CII counsellors are also held annually in conjunction with „Manthan‟ to refine the approaches e.g. In the TMW held on 1st May‟08, the approach for identification of CSFs and critical issues was deliberated. In the TMW held on 12th May‟07, the action plan for the CSFs developed as sequel to earlier workshop were presented by respective champions and the approaches were refined based on learning from the workshop.

GMs lead the Group level workshops which are held prior to Unit level TMW, for review of strategic plans. In these workshops, group-specific CSFs and gaps are identified and action plans are drawn to bridge the gaps.

Unit’s concept of world class

Being a leading supplier of products and services in a selected market by successfully competing in quality, delivery, cost, customer services and innovation.

Fig. 1.2: Unit’s Concept of World Class

Leadership


Leaders not only develop and advocate organisational values; they practice these as role models. Following examples reinforce this fact.

Zeal to Excel and Zest for Change- Change initiatives like LEAN, DTC, Six Sigma, DWM, Knowledge Worker, Multiskilling, etc. are patronised by the ED himself and are championed by GMs and HODs. IPR incentive Scheme 2008, Reward scheme 2008, BEAT, IMPRESS, „BHEL Excel Awards‟ promote individual and team excellence.

Integrity and Fairness in all Matters- Well defined, documented, and transparent systems and processes such as Pay Scales, Perks, Benefits, Promotion policy etc. are put on intranet, thereby ensuring transparency. On line recruitment, transparent e-MAP system for appraisal are some example of fairness.

Respect for Dignity and Potential of Individuals- GMs, AGMs, HODs personally participate and encourage participation of individuals in CFTs for improvements and recognise and reward peoples‟ efforts and achievements.

Strict adherence to commitments- BSC objectives, delivery schedules of customers are adhered to. The delivery commitments are a part of Balanced Score Card of ED, GMs, HODs.

Ensure Speed of Response- Demonstrated through DWM by setting daily targets. Leaders obtain stake-holders perception in this regard through respective Perception Surveys.

Foster learning, creativity and Team Work- Funding of R&D, change initiatives, training and development etc depicts commitment of top management to foster learning and creativity e.g. funds and dedicated teams are earmarked for DTC, Lean, six sigma, IPR etc.

Loyalty and Pride in The Company- Leaders take pride in Common Uniform, BHEL Bhopal Anthem and Slogan. Leaders lead and participate whole heartedly in various company functions and celebrations. Significantly low level of Employee Turn-over is an indicator of loyalty. (Fig 7.8)

ED, GMs and HODs role model the culture of excellence through their personal involvement and participation in change initiatives with a missionary zeal e.g. Deliberations in „Manthan 2007‟ led to several initiatives e.g. DWM, ED‟s Dash board etc.

GMs and HODs participate in Inter Unit Functional Heads meet to capture and assimilate best practices of other units e.g. Product GM, TQ Manager and TQ co-ordinator participate in Inter Unit BE workshops held every year which are facilitated by Corporate Quality team. Similarly GMs and senior executives participate in inter unit meets of respective functions such as MM, P&D, Finance, HR etc.

The top management identify, personally lead and participate in capability building initiatives based on CSFs and strategic Issues e.g. DTC, Lean , Six Sigma , Capacity Augmentation, Recruitment, Collaborative projects etc (Fig. 1.4, Fig. 1.5). The leadership team of BHEL, Bhopal demonstrates initiative of leading change initiatives in the corporation e.g. Most of these initiatives viz. DTC, Lean, Six Sigma, Collaborative projects were rolled out for first time at Bhopal.

ED led DTC rollout in the corporation with an aim to make the products cost competitive and it was piloted by GM(TCB) in Transformer division with McKinsey as the Consultants in 2005 and was subsequently extended by GM (EM) and GM (TPTN) in 2006 in their respective products through in-house efforts. LEAN was introduced for the first time in entire corporation in Switchgear and Transportation divisions in 2006. Project Teams with Champions were identified for implementation of DTC and LEAN concept and progress reviewed quarterly by Unit Steering Committee headed by ED. Introduction of LEAN in Hydro and Electrical Machines group in 2008-09 is a part of EDs BSC.

Top Management launched Six Sigma initiative in 2005. ED and GMs have themselves identified, prioritised and championed more than 130 Six Sigma projects in first, second and third phase. HODs are Companion to the Six Sigma black belts while GMs are Champions. The entire top management team comprising of ED, GMs and HODs underwent two day training on DMAIC approach. The top management leads collaborative approach for technology leadership through projects with leading institutes like IITs/ IISc. These projects are steered by middle level executives.

The top management team reviews the organisation structure from time to time and changes the same to deliver the desired results e.g. an exclusive and dedicated modernisation group headed by GM for capacity augmentation was created in 2005. Apex BE taskforce comprising of six GMs and two AGMs has been constituted as a sequel to „Manthan 2007‟ for strengthening the business excellence movement. Rationalisation of functions and structure is also reviewed and changed from

Leadership


Leaders Nos. Leaders Nos. Leaders Nos.

Six Sigma Champions (GMs/ DROs) 18 Six Sigma Companions (HODs) 40 Six Sigma Black Belts & Green Belts 180

TQ assessors (E4-E8) 90 QC facilitators (E1-E7) 152 BSC Coordinators (E3-E7) 20

ISO 9001 assessors ( E3-E8) 45 5S Facilitators 29 Website Facilitators (E4-E7) 30

HSE assessors 10 BE Leaders (E4-E7) 18 CRISP process owners (E5-E7) 10

NABL assessors (E4-E7) 8 E MAP Champions & Review Facilitators (E1-E8)

65/13 Internal Faculty (E1-E8) 205

Vendor assessors (E1-E7) 125 QC Co-ordinators (E5-E7) 25 Chairmen of Quality Councils, Shop Council, PQG, etc (E6-E7)

50

DTC Teams 98 Lean Teams 113 KRA taskforce members 15

Fig: 1.4: Involvement of Various Leaders (2007-2008)

Year Department/ Function Purpose

1996 Contract Management Group Single Point Contact for Customers of Thermal Projects

1998 Business Excellence Promotion Centre Implementation of TQM related activities

2002 Project Management Group Project Management of Hydro Jobs

2004 Central Dispatch Centre Thrust on Timely despatch and on receipt at site

2005 Modernisation department Thrust on Modernisation of Hydro, EM , Transformer facilities

2005 Projects Division PDX Thrust on Small Hydro Business and Balance of plant orders

2006 DTC Thrust on DTC

2007 Transformer New Block Thrust on Transformer New Block

Fig 1.3 Examples of Organisation restructuring

Schemes PIP PIR QCC CFT QIP JIP Six Sigma DTC

LEAN RCA

Task-forces

Purpose Productivity

Enhancement Design

Improvement Workers

Involvement Specific

improvement Quality

Improvement Quality

Improvement Process

Improvement Cost

Reduction Root cause

analysis MIs Review

projects /persons

138/414 34/170 179/1582 24/252 72/288 31/122 30/ 150 226/600 20/65 13/110

Process Champion

GM (P &D) GM (P & D) GM (P & D,) Need based GM (Q,) Product GM GMs /DROs GMs GM(Q) GM(P & D)

Levels involved

Executives & Supervisors

Senior Executives

Workers Senior

Executives Executives & Supervisors

Senior executives

Executives & Supervisors

Executives Supervisors

Executives Executives

Fig. 1.5: Various improvement projects (2007-2008)

time to time for effective management of processes and functions e.g. PMG is now part of Hydro product group, Hydro Lab and Hydro Engineering of Hardwar unit are also a part of Hydro product group. Organisation restructuring is carried out regularly. (Fig. 1.3)

GMs are the Champions and HODs/ Functional heads are the chairpersons of CFTs for review of various systems/ processes. HODs and HOS plan for various improvement activities and schemes in the beginning of the year through e-MAP and take Capability Building initiatives in respective work streams. They also lead and involve themselves in improvement teams which number over 700 in different functional areas (Fig. 1.4, Fig. 1.5). Leaders encourage participation in improvement activities by leading improvement projects and also motivate Individuals and teams to participate in various improvement initiatives with collaborative approach (Fig. 1.6).

The Leadership team provides all resources for the change initiatives e.g. The Product specific core teams for DTC and LEAN worked on the projects exclusively and were relieved from their work place and regular responsibilities during the period (six months each). A „Centre for Excellence‟ has been created with an environment which facilitates creativity and innovation. Leadership of BHEL Bhopal also ensures that funds are never a constraint for training and learning activities. All Product groups

are encouraged to spend at least 2% of group turnover on Product Development. Human Resource Development Centre (HRDC), Bhopal and Human Resource Development Institute (HRDI), NOIDA regularly organise a number of courses for training and development activities (Fig. 7.3a to Fig. 7.3d). Leaders undergo training periodically and also train others on their area of expertise. Over 200 senior executives act as regular faculty for various courses.

Leadership


Fig. 1.8: Forums for feedback on leadership effectiveness

Leadership effectiveness survey 2007 (Fig 7.1c)

Leadership feedback from section of employees by ED

BSC/e MAP assessment and Reviews

TQ assessment feedback reports.

Business Results

Employee / Customer / Society perception surveys

Formal/Informal meetings

Fig. 1.6: Examples of collaborative improvement initiatives

Collaborative technological projects with IITs/IISc.

DTC, Six Sigma, DWM, QTM, Quality circles, IMPRESS

Inter-unit HR/MM/Quality/Finance functional meets

GMs visit to Lucas TVS for 5S implementation

Participation in CII Study Missions/Quality Summits

TQ assessment (Internal/Other organizations)

Surveillance/Certification audits for ISO systems

Fig. 1.7: Leadership Development program

Advanced Management Program for GMs

Strategic Management Programme for SDGMs and AGMs

General Management Programme for Sr. Mgrs & DGMs

Young Managers Programme for Managers & Dy Manager

External experts are engaged to impart training on specialised subjects like DTC, Lean Management, Oracle 9i, Six Sigma, OHSAS, Daily Work Management, etc.

Improvement in leadership qualities is being pursued through the Management Development Programmes held at Hyderabad, Bhopal, HRDI - Noida and IIMs (Fig. 1.7). Executive Director, GMs and AGMs also participate as faculty in SMP and GMP programme and interact with new recruits. Leadership Effectiveness is assessed periodically through surveys and other forums (Fig 1.8) to obtain feedback on leadership style of top management. Improvement in LES index, (Fig. 7.1c) is a measure of the effectiveness of the leadership of BHEL, Bhopal.

Mentoring scheme launched by ED is in place to facilitate adaptation from academic institution to the commercial organisation for new Engineer Trainees. More than hundred middle level executives (ED‟s BSC objective) have volunteered to provide mentoring support. 1b. Leaders are personally involved in ensuring the organisation’s management system is

developed, implemented and continuously improved:

Leaders at various levels focus on strategic issues & direct the action plans commensurate with unit/ departmental BSCs so that systems are developed, improved and implemented, (Fig.2.6) as per framework of cascaded organizational goals. This process of translation of objectives from BSC to individual KRAs (e-MAP) helps in alignment so that products and services are delivered to the customer and other stakeholder‟s needs are satisfied. VMV, Polestar, Policy documents and Manuals, BSC, Management Instructions govern the operations of BHEL, Bhopal. Corporate Top management with participation from all units develop various policies viz. Works Policy, Purchase Policy, Quality Policy, HSE Policy, Energy Policy etc and are finally approved in MCM. CFTs constituted by ED involving senior executives, develop Quality Manual, HSE Manual and Management Instructions which form the backbone of BHEL, Bhopal‟s operations. Specific purpose CFTs are constituted for developing guidelines on specific subjects which are then institutionalised. The process measures (KPIs) and process owners (Cr. 5a) for all the processes are also identified by the CFTs and performance is monitored by GMs.

The Policies, Manuals and Management Instructions (MIs) are reviewed and changes are effected for improvement in the system. New initiatives are piloted and subsequently the procedures for implementation across the unit are standardised e.g. a new MI has been developed for DTC. 13 standing taskforces (as against 6 earlier) comprising of senior executives have been constituted by ED for review of all MIs including those not covered in QMS. The standing taskforces have reviewed and revised all the MIs in 2007. As a sequel to review of current challenges by the Apex BE taskforce, a need was felt to review and revise the KPIs so that relevant process measures are tracked and monitored. Subsequently, the KPIs of all functions were reviewed and updated this year in April‟08 and provision has been made in the respective MIs for their annual review.

Leadership


Fig 1.10: Typical MCM agenda

Fig. 1.10: Typical MCM Agenda

Review of Operations

Project Review / Contract Closing / LD Status MOU Projects.

Supply of Spares and age-wise analysis

Review of Quality Related Aspects

Engineering review - Tech. Development and Commercialization of R&D products

BUSINESS OUTLOOK-Market Trends, Status of Order Book

Fig. 1.11: Examples of leadership involvement

ED chairs unit steering committee of ‘LEAN’ & DTC GMs as champions and HODs as companions for six sigma projects Outsourcing Fabrication at site-championed by GM (FBM &Feeders) Championing system for Balance of Plant (BOP) orders by GM (IT & PDX) Championing of DWM by all Product managers and HODs Capacity enhancement by GMs - MOD, WEX and P&D Outsourcing of non-core processes by Product Managers Ownership of CRISP Boards by HODs MECOM in support of communication strategy. Impress and Excel schemes for reward & recognition etc

Fig. 1.9: Principles of Corporate Governance effectiveness

Independence and versatility of the Board;

Integrity and ethical behavior of all personnel;

Recognition of obligations towards all stakeholders – customers, employees and shareholders;

High degree of disclosure and transparency levels;

Total compliance with laws in all environments

Achievement of above goals with compassion for people

and environment.

BHEL‟s Corporate Governance policy is based on the six principles (Fig.1.9) which demonstrate compliance with high degree of disclosure and transparency. ED took the lead and promptly appointed senior executive as CPIO in Nov.‟05 immediately after RTI Act 2005 came into effect. Till date more than 250 requests have been disposed within stipulated time limit of 30 days.

ED, BHEL, Bhopal presents the data/ information in the monthly MCM (Fig. 1.10) which is further compiled and presented to board of Directors.

ED communicates the outcome of MCM meetings to UBC immediately. As an improvement in the earlier process, the agenda and data is now uploaded through VPN for deliberations in the meetings.

Leadership has created a systematic structure for organisation‟s focus towards excellence which is reviewed from time to time for its effectiveness e.g. the roles and responsibilities of BEX group have been revised to include all change initiatives under one umbrella. Similarly the structure of excellence councils at unit and group level have been revisited in TMW and revised from three tier to two tier.

BE leaders steer business excellence activities at group level. Most of the present Product GMs are trained TQ assessors (4 out of 7) and were earlier BE Leaders of their group. Similarly, unit steering committees are in place for review and refinement of approaches related to change initiatives such as DTC and LEAN. Introduction and continuous review and refinement of Balance Score Card and e-MAP are few examples of involvement of Leaders in development, implementation and improvement of the Management Systems of BHEL, Bhopal (Cr. 2c, Cr. 3a). ED and GMs themselves prepare their balanced score cards based on the Corporate and unit BSC respectively. In turn HODs and HOS prepare their BSC in alignment with GM level BSC.

ED and GMs continuously refine systems of communication for unit‟s plans, objectives and targets. Based on review of communication channels, refinement has been done and CRISP Boards, Plasma Screens, LEDs, Visual Display Boards with ANDONs, Boards on BSC etc have been introduced. Leaders continuously stimulate excellence in various fields through capability building initiatives such as DTC, LEAN, Six Sigma and introduction of appropriate reward and recognition schemes e.g. In order to stimulate excellence in engineering and also protect intellectual property, a modified IPR incentive scheme has been launched by leadership. Also to encourage group dynamics, commitment and team work for uniform production (CSF of the unit) Revised Reward Scheme 2008 has been launched in Feb 08. IMPRESS and Excel Awards are some other examples.

Some other examples of involvement of top leaders in development, implementation and review of management systems to support Unit‟s Plans and Product/ Function specific short term strategies (Cr. 2c) are illustrated in Fig. 1.11.

Leadership


GM EM visited KBL Pune and ACC Mumbai in Nov 07 and GACL Mumbai in Jan 08 ED and GM(TPTN) visited DLW in May 08 and April 07 and deliberated on various customer related issues. GM(Hydro) visited Koldam and Parbati Sites in Feb 07 and educated the customers on proper storage systems. GM(Q) visited PGCIL and NTPC headquarters in Feb. 2007 and deliberated on QAP customer hold points ED, GM (SCR) and GM(TPTN) visited GM(WR) in July 2006 and extended proactive support for restoration of Mumbai Suburban Services

affected due to unprecedented rains and water logging. ED and AGM (STS) visited Sr. ED (Tech.) NPCIL/ Mumbai which converted a hostile customer into our brand Ambassador. ED, GM (TPTN) and AGM (TXS) visited Member (Electrical) and Member (Mechanical), Railway Board on 22nd and 31st May 06 respectively.

The customer need of developing coaches and MOU for electrics emerged during the interactions. GM (TCB) and AGM (TRS) visited ED (Engg.) and ED (Operation Services) NTPC in Sept 2005. The customer need of developing facility for

HV test at site for repair services emerged.

1c. Leaders interact with customers, partners and representatives of society:

The unit‟s customer focus is depicted through the slogan (Cr. 1a) which aims at the success of customers. Leadership has established a customer management process (Cr. 5e) through which ED, GMs and HODs continuously interact with the customers. In addition to these forums, ED, GMs and HODs regularly interact with the customers in a proactive manner during „Non-Agenda Visits‟. Some of the examples are as follows:

GMs and HODs lead Joint Improvement Projects (JIP) with Customers, Vendors and Partners. These JIPs (Fig. 1.12, Fig. 1.13, Fig. 9.21) are a part of GMs BSC and focus on customer success in line with unit‟s philosophy. EDs, GMs and HODs are associated with customers as member of various forums such as CBRR, RDSO, PGCIL etc which are responsible for framing their business strategies (Cr. 5c). This has helped in better understanding of customer‟s future plans and business strategies thereby enabling alignment of BHEL, Bhopal‟s product plans e.g. development of 765 kVA , 500 MVA auto transformer, 1200 kV class Transformers, 250 MW Hydro-generators, WEG and 145 kV GIS switchgear which have been taken up based on customer‟s need for higher rating power systems.

ED and GMs lead in organising customer meets where latest developments and industrial trends are shared and the needs and expectations of customer are captured. Periodic co-ordination meetings of GMs and senior executives are also a source for understanding project related customer needs and expectations. Such interactions have helped BHEL, Bhopal to create web-site for on-line manufacturing status of transformers where customers can directly access the up-to-date manufacturing status of their equipment. The status of traction motors is also made available to customer through the TPTN website. Bilingual instruction manuals for transformers on web-site are a result of feedback received through such periodic reviews and needs expressed by customers.

Leadership has created a structure to facilitate day-to-day contact with customer representatives‟ e.g. Resident representatives of major customers such as M/s. NTPC, POWERGRID, RDSO, NPC, KPCL, Indian Navy etc. have been provided office accommodation inside the plant and residential accommodation in the township. As a result, GMs, HODs and executives of Engineering, Quality, Commercial and Manufacturing divisions have regular interactions with these customers. Product Managers obtain perception of customers periodically in a structured manner. Product Managers lead CFTs comprising of senior executives for analysis of survey results and for drawing action plans for improvement. ED reviews the analysis of survey and implementation of action plans.

BHEL leadership actively develops relationship with partners for harnessing business opportunities and formulating appropriate plans and strategies. In order to bridge the technology gap, engineering heads are constantly looking for partners and technology providers not only at premier institutional level but also at individual expert level e.g. Norwegian expert Mr H. Brekke for validation of existing profile for 300m Head Francis Turbine, Russian experts Prof GN Alexendrov for Controlled Shunt Reactor and Mr AK Lokhanin for transformer design, Prof. Joshi of GSITS, Indore and Prof Ravi of IIT, Mumbai for castings. Partnership with Toshiba and Railways for Delhi-Mumbai and Delhi-Howrah „Freight Corridor‟ project envisaging Transfer of Technology to BHEL, Bhopal.

ED and GMs enter into partnership and regularly interact with institutions for mutually beneficial partnerships e.g. partnership approach and periodic structured reviews with McKinsey and Co. for DTC and Lean, ISI for Six-Sigma, IITs and IISc for collaborative projects. Senior Leaders continuously interact with the suppliers for sharing their needs and expectations. Unit level and

Leadership


Product group-wise Vendor Meets are organised to understand their concerns and to share unit‟s plan for future. HODs are involved in providing necessary technology, tools, jigs and fixtures for establishment and improvement of supplier-processes (Cr. 4c). Training and guidance on various subjects is imparted to suppliers by BHEL experts. In order to review the needs of suppliers and improve relationship, Head (MM) and Head (Finance) meet office bearers of supplier associations regularly. Similarly, the suppliers invite senior executives of BHEL in their associations‟ meetings. Some major improvements made through supplier interactions are listed (Fig. 4.2, Fig. 4.3). The total approach of involvement with customers and suppliers is reviewed annually by the top management. As a sequel to reviews, all Product groups now take up JIPs (Fig. 1.13) as part of BSC objective.

Top leadership of BHEL, Bhopal continuously interact with state government, local leaders and social groups to get inputs for strategic society related initiatives. ED on assuming the charge of the unit meets Hon. Governor and CM of the state to understand and capture the needs and expectations of the society in general and state in particular. ED, GM(HR), Head(P&PR) and Head(Township) interact with cross-section of society representatives such as MLAs, Mayor, Corporators, District Collector, SP, Business Associations etc. These Interactions help BHEL to address a number of social issues and improvement in the surroundings e.g. Relocation of more than 1200 shanties to a safer place.

ED and GMs also lead society related initiatives such as championing the cause of environment and good health for future generation e.g ED and CMS have been instrumental in setting up of Yoga Research Centre in joint collaboration with Yog-Bharti, Munger. ED promoted study on effect of Yoga on various diseases and Head Kasturba Hospital took up specific research study and after thorough scrutiny by state level committee, the findings were shared with public. ED and GMs lead mass tree plantation drives where more than 10,000 trees are planted on a single day every year by cross section of society. An old age home “Anandam” established by BHEL Bhopal in April 2008, is an expression of the commitment of leadership towards society. This unique initiative was identified and lead by ED himself as a result of his interaction with retired employees.

ED and GMs lead socio-cultural activities to bring freshness in otherwise mechanical industrial life e.g. Lecture series, Melas and socio-cultural programmes etc. are organised every year. Membership to golf club is extended to distinguished members of society as well. ED and GMs promote and contribute towards excellence by being chairman/ members of various bodies (Fig. 1.14, Fig. 1.15) and sponsoring and promoting various activities. ED, GMs and senior executives regularly participate in learning forums such as CII Quality summit, CII & NABL assessments, ELECRAMA, ELROMA, SWICON, IMTEX and other seminars and conferences to imbibe and implement best practices, identify state of art equipment for capacity enhancement (CSF of the unit). The leadership of BHEL believes in promoting excellence through sponsoring of such excellence events and also by sharing learning through presentation of technical papers. Last year 24 technical papers were presented in National/ International forums. Leaders also nominate workers and supervisors for participation in various conventions such as CII/ QCFI Quality Circle conventions.

Fig. 1.12: JIPs with Customers in 2007-08

Modified design of 6FRA 6068 with stator coil anchoring with RDSO AMR AR4500 for DE locomotive with DLW Solving leakage problems in turrent and inspection covers with

PGCIL

Fig 1.14:

Executive Director Chairman - MP Chapter National Safety Council Vice Chairman of Board of Governor of Centre for Research

and Industrial Staff Performance Society Member of Research Council of Regional Research Lab.

(RRL), Bhopal Member, MPEB Regulating Body Member, Governing Council, BHEL, HRDI

Fig 1.15:

General Managers and other Senior Executives Council Member, State of MP, Institution of Engineers Chairman Production Engineering India Board, IE(I) Honorary Secretary – Institution of Engineers (MP Chapter) Vice Chairman Computer Society of India (Bhopal Chapter) Fellow members – IE(I), Institute of Chartered Accountants of India. Member - ASME, IIPA, NSC, IIBA, IIMM, BIS. Assessors-NABL, CII etc

Fig. 1.13: JIPs with Suppliers in 2007-08

Development of commutator hub with M/S SMPL Development of impellors with M/S UP Steel.

Improvement in packaging of dial type thermometers

with M/S PTCI

Leadership


Leadership of BHEL, Bhopal is committed to support and advance ten principles of UN‟s Global Compact Programme on Human Rights, Labour Standards, Environment and anti-corruption. The organisation has formulated its Mission Statement on CSR keeping - “Be a Committed Corporate Citizen, alive towards its Corporate Social Responsibility “ and eight thrust areas have been identified for action: Self-employment generation, Environment Protection, Community Development, Education, Health Management and Medical Aids, Orphanages & Old-age Homes, Infrastructural development and Disaster/ Calamity Management. As a policy, a budgetary allocation of 0.2% of PAT is made for CSR projects. Plant Environmental Committee headed by the Executive Director and GMs and DROs as members is in place for effective implementation of environmental systems (Cr. 2b & Cr. 8b). Salient activities for the year are taken up as EIPs in ED‟s BSC. Leaders encourage general members of society for creative and innovative work for betterment of the society. “Sapna” school for mentally disabled children is one such institution which is supported by BHEL leadership.

1d. Leaders reinforce a culture of Excellence with the organisation’s people: The culture of excellence is imbibed by leaders through people related initiatives like promoting employees for National Awards, Excel Awards, e-MAP, IMPRESS etc. Communication- formal and informal with employees occupies prime niche in management priorities (Fig. 1.16) for alignment with VMV, BHEL, Bhopal‟s Slogan and Polestar to reinforce Culture of Excellence.

Every year, ED and GM(P&D) personally address cross-section of all employees, around 1000, on first day of the financial year and share the achievements of previous year, challenges ahead and the plans for the coming year. This is followed by EDs address to the media through a press conference. ED and GMs also share achievements and plans in JPC and with representatives of all unions and association meetings held on the same day. GMs share the achievement with their respective groups. It is also shared with all stakeholders through in – house journal „Sandesh‟. ED also personally communicates achievements of all divisions and plans with cross-section of all employees, family members and society on 15th August and 26th January every year. ED decides the theme of tableau for 26th January and Vishwakarma Puja on 17th Sept every year. The themes for these occasions are always based on culture of excellence focusing on key initiatives/ challenges for the respective year. In addition to this, the award winning tableau and „Jhankis‟ are displayed in Milap and Kamyabi Melas for communication of culture of excellence to people.

ED and GMs directly communicate with cross-section of employees through MECOMs on current initiatives and challenges e.g. BHEL, Bhopal‟s Slogan and Polestar Statement were personally communicated by ED immediately after TMW and GM (P&D) shared the strategic Plan 2007-12. Top management personally communicates and obtains feedback from employees on all major process changes/ initiatives e.g. GM(HR) communicated the new Reward Scheme 2008 to cross section of employees. Earlier, he communicated changes in e-Map process to the e-Map Champions. ED and respective GMs themselves shared the need and objectives of DTC and LEAN programmes when they were rolled out in the unit.

The top management at BHEL Bhopal follows open door policy and GMs and HODs are accessible to all employees during their daily shop visits and also in their offices. Various formal forums (Fig. 1.16) and informal forums also provide access to senior leadership for all employees. Leadership team of BHEL, Bhopal has provided forums which further reinforce the culture of unity in diversity e.g. BHECNIS. BHEL Geet, BHEL, Bhopal‟s Slogan inspire the employees while common uniform and canteen, clubs, community halls etc are some of the unifying factors. Same Gifts are given to all grades of employees on various occasions such as New Year, accomplishment of targets, Golden Jubilee etc. Leadership team has also provided for procedures to handle any representation from employees. A separate grievance handling mechanism has been institutionalised for SC/ST/OBC. A Committee also exist for addressing any issues on sexual harassment. ED‟s, GMs, HODs and HOS BSCs cascading to individual e-Map (Cr. 2c), facilitate in aligning individual targets with organisational goals. HODs and HOS are personally involved in facilitating the selection of KRAs and performance plan of the individuals for the year. They also review the planned activities and provide directions and resources to ensure achievement of desired results.

Leadership


Fig. 1.17: Examples of formal recognition

IMPRESS winners eligible for Excel awards at corporate level

‘Gunta Karmi’ award to outstanding workmen

Outstanding Engineer Trainee award Ex CEO meet to honour Ex chief executives Sports complex named after late Shri J P

Narayanan, Ex GM of BHEL and international cricket commentator

Award to project leaders & champions of Six Sigma project competition

FORUM FOCAL SUBJECT CHAIRMAN MEMBERS FREQUENCY

ED's Communication Business Related ED GMs and DROs, Monthly

Input Review , Dispatch Review & Cash Collection

Production and Dispatches; Cash collection

ED PMs/FMs and HODs OF MFG, Engg. and Commercial

Weekly

Inventory Review Inventory and Mat. Consumption

ED PMs/FMs, HODs OF MFG and MM Monthly

Apex TQ Council Business Excellence initiatives

GM(P & D) 5 GMs & 2 AGMs Fortnightly

Steering Committees DTC and LEAN ED Core Teams Quarterly

Annual and Half Yearly Review Meetings

Performance Parameters ED GMs, DROs, HODs, all executives and other employees

Half yearly

Joint Council Meeting At Unit Level

Union /Workers Related ED GM (HR), representative union members.

Quarterly

Plant Quality Committee Quality and System Related Issues

ED GMs, DROs and nominated AGMs Six monthly

Union/Association Meetings Employees Related GM(HR) GMs representative of employees , AGM (HR), HODs

Frequent/ need based

PQG//FG and Departmental Reviews

Quality and System Related Issues

PM/FM /HOD DROs TO PM/FM and nominated members / DROs to HOD

Six monthly/ once in two months

Shop Councils Productivity, Quality And Safety Related

HOD Management and Union Representatives

Monthly

Fig 1.16: Typical Examples of Accessibility and Review forums

As a sequel to the refinement of operations review process for meeting the stretched top line and cash targets, ED has introduced the concept of weekly review where in daily targets for the week are agreed upon and the same are monitored on daily basis by GM (P&D) for appraisal of ED. GMs and HODs analyse the DWM data and take course correction for day to day achievements.

The IPR Incentive scheme for patents and copyrights has a provision of awards at three stages viz submission, filing and grant of patents/ copyrights. Reward scheme for workers and supervisors has been reviewed and revised to promote individual and team excellence. (Cr. 3e) In order to motivate and recognise efforts towards fulfilling BSC objectives, the Plant Performance Bonus scheme has been reviewed and is now calculated based on achievement level in 5 key performance parameters and Unit BSC score.

BHEL Bhopal has adopted a three dimensional recognition approach for „apt‟ and „timely‟ recognition of individuals and teams resulting in positive change in Employees perception (Fig. 7.1a, Fig. 7.1b).

Formal recognition: BHEL leadership has instituted a variety of awards to recognise excellence in the organisation (Fig. 1.17) ED and GMs personally give awards to persons/ groups for unit level achievements e.g. ED rewards employees for excellence on occasion of Republic Day celebrations. ED and GMs felicitate more than 150 employees during Quality month every year for their contribution towards Quality initiatives. BEAT award and IPR incentive are given by ED in presence of all GMs. ED personally gives certificates for „Swasth Karmchari‟, LEAN and DTC CFTs, Lead auditors, Six Sigma black and Green belts etc.

Informal recognition: ED and GMs recognise individual and teams through a number of informal recognition platforms such as departmental Display Boards, Meeting and Photographic sessions with ED, remarks on project reports e.g. ED endorsed the contribution of DTC teams by putting a congratulatory remark on the DTC sign off report. Such achievements are also publicized through in-house journal “Sandesh” and Corporate monthly journal "Pratibimb".

Day to day recognition: ED, GMs and HOD believe in day to day recognition through verbal appreciation, „Shabash‟ scheme and „pat on the back‟ during formal and informal meetings, shop

Leadership


visits etc. Additionally, to foster cultural values in the organisation, employees and their wards are also recognised for their achievements in the field of education, cultural, sports etc. in public forums.

The top leadership of BHEL, Bhopal believes in recognition of not only the serving employees but ex-employees also e.g. all ex-EDs of Bhopal unit were felicitated along with their spouses in special function held in Dec.‟04 and Nov 06.

1e. Leaders identify and champion organisational change:

Taking cognizance of triggers from internal and external environmental drivers, excellence movement is spearheaded by the leaders through a structured change management process. Strategic Plans and Strategy Map provides trigger for change management. In order to meet the strategic objective of uniform production ED championed the methodology of DWM for effective planning, targeting and monitoring of operational, engineering and business excellence parameters.

BHEL leadership carefully studies the business environment vis-à-vis opportunities and threats perceived and champion the organisational change to meet such challenge. Such studies are taken up in collaboration with professional experts in respective fields e.g. Top management partnered with Hewitt Associates for study of HR processes which resulted in launch of new performance Management System (e-Map). Similarly, a tie-up was entered into with Mckinsey in 2004 for repositioning study of entire corporation which resulted in identification of initiatives on „Business Strategy, Órganisational Effectiveness‟ and Capability Building‟‟. These were further prioritised and decision taken to work on capability building initiatives. ED, BHEL, Bhopal took a lead in entire corporation and rolled out DTC and Lean initiatives (Cr. 4a, Cr. 5b). The need of cost competitiveness, a CSF of BHEL, Bhopal and cycle time reduction led to partnering with ISI for Six sigma initiative. Also, the need of technology acquisition and product developments identified by Product and Technical Committees led to concept of Collaborative projects with leading institutions (Cr. 4d). The growth envisaged in power and industry sector and growth envisaged in strategic plans called for systematic capacity enhancement initiatives (Cr. 2a, Cr. 2c) which has led to capacity enhancement of Hydro, Electrical Machines & Transformer Products and de-bottlenecking.

ED and GMs create structures for such change initiatives and personally lead the change programmes. The objective behind identification of these initiatives and the planned results are communicated (Cr. 1a, Cr. 2c, Cr. 2d) e.g. Having identified DTC as a change initiative, ED formulated CFTs to carry out this activity which is monitored by the unit steering committee headed by ED himself. Similarly ED himself chairs the Unit Steering Committee meetings for driving „Lean‟ initiative in Switchgear and TPTN groups. A dedicated group has been created, headed by GM for modernisation and expansion activities. A structure comprising of e-Map Champions and KRA taskforces has been put in place to ensure effective communication, implementation and continuous refinement of this change initiative. The Six Sigma initiative is being led and facilitated by GMs and HODS who are the respective project Champions and Companions. The monitoring and review of change initiatives are part of strategic objectives of ED/GMs BSC.

ED, Product GM, GM(P&D) and GM(CI) drive the capacity enhancement initiative through formulation of comprehensive investment plan including sensitivity and risk analysis. The investments are secured through corporate sanctions for which required supporting data/ presentations are made to the corporate investment committees. All investments are met through internal accruals (Cr. 4b). Leadership has drawn investment plans of around 1200 Cr during 2007-12 against total corporate plans of 3200 Cr.

The salient improvements as sequel to assessment and review are illustrated (Fig. 1.18).

Fig. 1.18: Improvements as sequel to A & R

2004-2005 Divisional strategic Plan revisited & revised. Top Management workshops Review of Performance Management System

2005-2006 Review of Performance management system Six Sigma approach Initiated. “Centre for Excellence’ for DTC and piloting in TCB

2006-2007 Leadership effectiveness Survey Adoption of DWM . Group level workshops 2007-2008 Top Management workshops DWM institutionalised Lean manufacturing in SCR and TPTN divisions DTC in EM and TPTN group.




Policy and Strategy


Sources / forums Used for

Shareholder

Management Committee meeting Policy guidelines and strategies

Top management workshops-Corp Level Unit Strategic Plan and long term CSFs

Five year Strategic Plans

Business Sector Projections

Strategy map

Corporate Strategic Plan Functional Roadmaps –Engg, Quality etc. Corporate Roadmaps (Strategy maps)

Unit strategic Plan Broad Objectives (3 years Rolling Plans) Business Sector Projections

Unit Strategic Plan Annual Budget

Business Sector Projections

Order Book

Unit Top Management workshop -Manthan Unit BSC, Challenges & CSFs Annual Investment Plan

MOU & Corp BSC

Annual Budget

Brain Storming Session

MIRs /KPIs

Customer

Competitive Analysis by marketing groups Product Specific strategies Challenges, CSF

Product / Technical Committees

Customer Surveys

Customer training /Meets

Customer visits

Resident Inspection Agencies

Employees

Joint Committee Corp level employee related strategies

Joint Plant Committee Unit level employee related strategies

Shop Councils Group level employee related strategies

Union & Association feedback & interactions Corp & Unit level strategies

Employee satisfaction surveys Opportunities for improvement

Mecoms Unit level HR issues

Vendors

Vendor meets Vendor related strategies

B2B portal

Vendor Perception surveys

Society

Corp . MOU CSR Targets

Society survey Opportunities for improvement, CSR initiatives

Fig. 2.1: Sources of information

2. POLICY AND STRATEGY

2a. Policy and strategy are based on the present and future needs and expectations of stakeholders:

The present and future needs and expectations of the stakeholders are collected through various means as given in fig 2.1, analysed and form the basis of policy and strategy formulation. The Unit P&D coordinates with Corporate P&D and various product and function groups of the unit in developing the policy and strategy for the unit. It is both an amalgam of top–down and bottom-up approaches. The policy documents include Strategic Plan (SP), Broad Objectives and Balanced Score Card at unit and group levels. Analysis by experts/ consultants groups form a crucial input in the formulation of strategic plans. For example M/S McKinsey was appointed to undertake a comprehensive study of business environment and recommend improvement approaches. Mckinsey in the repositioning study identified initiatives on „Business Strategy, Órganisational Effectiveness‟ and Capability Building‟‟. These were further prioritised and a decision was taken to work on capability building initiatives. ED, BHEL, Bhopal took a lead in entire corporation and rolled out DTC and Lean initiatives at Bhopal. The other improvements in this direction are illustrated below (Fig. 2.2). In line with the governments vision of “Power for all by 2012” and the projected demand of power plant equipment the need for capacity augmentation was triggered, which led to specific expansions in the unit (Fig. 2.8) and also setting up of Central Stamping Unit and Central Fabrication Unit at Jagdishpur and acquisition of Bharat Plates and Vessels Limited in line with corporate plan. The plan for synergising the strengths with major customers triggered JVs with NTPC and NPCIL for EPC contracts & power equipment.

Policy and Strategy


2b. Policy and Strategy are based on information from performance measurement, research, learning and creativity related activities:

Corporate level Top Management workshops provide the appropriate forum for review of overall business scenario and challenges e.g. some of the key issues presented, discussed and analysed during the workshop are illustrated below (Fig. 2.3). The outcome of this workshop facilitates the formulation of unit level strategic plans commonly referred as divisional plans (Fig. 2.6).

The revenue budget, broad objectives as well as strategic plans have direct link with the previous performance indicators like turnover, value added, order booking, inventory, PBT, capital employed etc. This information is derived from internal MIS and as such provides a closer insight for future policy and strategies. Some of the performance parameters which are regularly measured and monitored are illustrated below (Fig. 2.4).

These MIRs also provide comparison of performances against the budget for the year as well as the last year‟s performance. In addition Business Parameters of last ten years compiled at unit level as „Facts at a Glance‟ and at corporate level as „Ten Years Digest‟ provide an intra and inter unit financial analysis and a base for product-wise analysis.

Stake holder 2000-2002 2002 - 2004 2005-07

Customer Business Sector Customer surveys Customer meets, Customer visits, Customer Training, Competitor Data

Customer Response Centre, Customer survey, Consultants inputs, Lost tender analysis

Customer surveys, Non agenda visits, Reports of consultants and experts, Product & Technical committee

Employee Employee perception Surveys, Structured CFTs as Feedback of Surveys, Exit Interviews

Revision In Methodology Of Employee Perception, Focussed group discussions, MECOM

EPS, JCM, JPC, Plant Council

Share holder Ten Years Digest, Facts at a glance, MOU Competitive Analysis, McKinsey report on repositioning

AGM, Media reports, Consultants

Supplier Open House meetings, Discussion with representatives of associations

Structured MM Heads Meets Vendor Meets, Industry Association

Society Structured Survey Structured Survey with wider level of respondents

Society Survey, Interaction with associations, public officials

Fig. 2.2: Improvements in methodology for collection of stakeholder Information

Fig 2.3: Business Scenario and Top Management Workshop Agenda

Top Management Workshop agenda

Growth patterns domestic / international.

Economic indicators. Demands / consumption

patterns. Electricity investments. Competitor activity/ technology. Energy Policies. Market projections. Benchmark analysis. Positioning.

Business Scenario 2002-07

Total planned capacity addition of 42000 MW by Govt. - out of which 22000 MW was actually achieved and BHEL’s contribution was in 18000 MW.

Hydro business to double. Booking Capacity to 2500

MVA in Transformers and

3500 nos. in Switchgear.

Business Scenario 2007-12

Total expected Capacity Addition - 68869 MW. Hydro - 15585 MW; Thermal - 50124 MW. In addition, during XI Plan, 12000 MW can

come up under Captive Power Generation and 13,500 MW through NCES.

Inter–regional Power network to grow from 16500 MW to 37000 MW.

Railway freight and passenger traffic period to grow @ 10% and 7% P.A.. Dedicated freight corridors expected to come up fuelling demand for high capacity locos.

Stake Holder Performance parameters

Share Holder Turnover, Gross Margin, Value added and PBT, Physical turnover, Market Share, Inventory, Cash flow, Capital Investment, M/c tool Utilisation, Order Book trend –Confirmed and anticipated, Working Capital, Employee Productivity, PI to PO conversion, SRV clearance, Energy Consumption, inter-unit benchmarking data (42 parameters).

Customer Delivery performance, Delivery Indices, Customer Complaints, Customer training, Response Time, resolution Time etc.

Employee Training mandays, absenteeism, grievances, accidents, Involvement in improvement Plans.

Supplier Vendor Ratings - performance on quality, delivery and service related parameters.

Society Expenditure on welfare measures, Support to charity, welfare, education etc,

Fig. 2.4: Performance Parameters

Policy and Strategy


Fig. 2.5: Examples of Learning from Other Organisations

Lean Management from McKinsey. Six Sigma from Indian Statistical Institute. Design to cost from McKinsey.

Reverse and Forward Auctions.

Analysis of internal indicators viz. cycle time and process variations triggered the need for six sigma approach for process improvement in 2005 through a handholding approach with Indian Statistical Institute. Since then 130 projects have been completed (Cr. 5b, Fig. 9.32c) resulting in reduction in cycle time and variability. The competitive analysis triggered implementation of DTC in Transformers, Electrical Machines & Transportation groups , Lean in Switchgear and Transportation groups, capital investments in Hydro, Electrical machines and Transformer groups and adoption of on-site fabrication work. BHEL, Bhopal also gathers market research reports in related product lines and product development efforts worldwide through environmental scanning, internet and print media report. The status report is prepared and shared in MCMs and Product and Technical Committee meetings. A constant vigil on the product development and emerging technologies around the world is carried out by product engineering groups to keep them updated and plan strategies for development, acquisition, or collaboration. These are discussed at Product/ Technical Committee meeting (Cr. 4d) for final decision making e.g. development of 765 kVA , 500 MVA auto transformer, 1200 kv class Transformers, 250 MW of Hydro-generators and WEG motor which have been taken up based on customer‟s need for higher rating power systems.

The learning from others and pilot implementation is a continuous practice for improvement (Fig. 2.5).

The performance analysis of competitors in respect of financial performance, technology, commercial terms and conditions is done by Business Sector marketing groups through tender analysis. Consolidated findings are discussed in Product and Technical Meetings and presented in MCM where appropriate decisions are taken and strategies are formulated.

BHEL Bhopal is aware of its responsibilities towards society, environment, and legal issues. The relevant stake holder's ideas are analysed and incorporated in the strategy formulation. The company interacts with the stake holders at various forums e.g. shareholder meeting, discussion with ministries and other government departments, signing of MOU, interaction with major vendors and customers, Unions and other employee representatives. Policies of social welfare measures such as vocational training programmes (Cr. 8b), Ananadam (an old-age home) Massive Tree Plantation, Yoga Research Centre, adoption of Global Compact principles etc are some of the examples of using stake holder ideas. Targets are set for Environmental Improvement Projects (EIPs) as part of MOU and include projects like rain-water harvesting system, Tree plantation, Green Coverage, Energy savings system, Resource Conservation, wireless fire protection and state of art painting booths.

2c. Development, Review and Updation of Policy and Strategy:

Policy and strategy is developed, reviewed and updated through a three tier system (Fig. 2.6).

National Plans and Policies


Business Plan

Systems Plan

Product Plan

Strategic Divisional

Plan

Functional Plan


Capital Investment

Plan

Three year rolling plan-

Broad objectives

Product Development

Plan

Annual Budget

Corporate BSC CSF Unit BSC

Global Market Domestic Market

Strategy Map

GM BSC HOD/ HOS BSC

Policy and Strategy


Product Hydro Transformer Electrical machines

Projected CAGR (%) 29 26 18

Capacity addition 720 to 2500 MW 12000 to 15000 and now planned upto

30000 MVA

650 to 1350 Nos and now planned upto

2250 Nos.

Fig. 2.8: Major Expansion Plans

Enunciation of various policies such as Works Policy, Purchase policy, Quality Poicy, HSE Policy, Information Policy, AIDS Policy, KM policy, Polestar of HR is done at Corporate level to bring into focus and to clearly spell out direction and priorities in respective areas. Strategic Divisional Plan - Five Year Plans P&D Group at unit level interacts with Product groups to formulate product growth strategies and plans which are cascaded from the projections arrived at during the corporate Top Management Workshop. The comprehensive divisional plan is further discussed with ED and GMs and draft plan is submitted to Corporate P&D. Discussion at corporate level facilitates finalisation of draft plan. Divisional Plans are then finally revised in line with Corporate Strategic Plan. The first such long term strategic plan document was issued in 1997 as „Perspectives for 2002‟ followed by „Strategic Plan 2002-2007‟ and now „Strategic Plan 2007- 2012‟.

Product Plans Product plans emerging from strategic plans are prepared every five years and reviewed periodically. These contain the product profile, collaborations, business profile, technology and investment plans.

Strategy Maps: These are drawn to spell out the strategies that the organisation shall adopt both at long term and short term basis.

Functional Road map : Function wise roadmaps are drawn to meet strategic objectives for fulfilling the vision and mission of the organisation such as Engineering road map, Quality roadmap etc.

Three Year Rolling Plan (Broad Objectives) Broad Objectives of the Unit are prepared based on a structured process in the month of Aug-Sept every year. P&D consolidates the Unit level Broad Objectives and organises a review with top management and finalises the same.

The Annual Plan – Budget and Short Term Specific Strategies The Annual Budget is guided by the growth objective of long term plans and the present business prospects. A crucial objective of budget exercise is to set stretched targets. The targets are stretched compared to Strategic Plan and Broad Objectives projections. It details out the information on revised estimates (RE) of current year, budget estimates (BE) for next year‟s turnover, order book position, export turnover/ spares turnover, operating result, cash position, inventory position, etc. The Budget is discussed and reviewed with Corporate Team and Directors and finally approved by Board.

Performance is reviewed every week at unit level - product group wise and monthly at corporate level (Management Committee) unit wise, for course correction strategies. Each product/ function group also plans the short term strategies for the year for achieving the budgeted targets depending on volumes, product mix and customer requirements specific for the period.

In order to balance the long term and short term needs of the stakeholders and to effectively cascade and deploy the plans and strategies the Balanced Score Card have been effectively used in the organisation since 2003. It now forms the basis for Plant Performance Payment also. The BSC approach has been continuously reviewed and scope extended (Fig. 2.7). BSC has now been linked to individual e-MAP.

The Performance planning and Appraisal system was reviewed in 2001 and M/s. Hewitt associates were engaged for development of a new performance appraisal system (e-Map).

BHEL Bhopal identifies long term and short term Critical Success Factors (CSF). The long term CSFs are enunciated in Strategic plan of the unit while short term CSFs are deliberated and finalised every

2003-04 2004-05 2005-06 2006-07

Introduction at unit level Extended to Group level Further extended to HOD level Further extended upto HOS level

Fig. 2.7: Deployment of BSC approach

Policy and Strategy


Sl. CSF Key

Processes Process Owners Measure Strategy

1 Uniform Production Planning GM(P & D) Monthly and quarterly performance

Daily Works Management -Monthly weekly & daily handing over and dispatch plans

2 Cost Reduction

Material Procurement

Head, Material Management

Material % GTO net of ED Reverse auction, spot buying, competitive buying

Cash collection

Head , Commercial

Cash collection, Collectible & deferred debtors, Sundry Creditors-as No of days of T/O

Daily Works Management Monthly weekly & daily handing over cash collection plans, Sequential and complete supplies

DTC Management

Head-TCB, EM , TPTN

Savings Partnering with McKinsey for Transformer product and in-house efforts for switchgear and Electrical Motors products

3 Timely Availability of Skilled Manpower

Recruitment Head, human Resource

No. of Exec., supervisors, artisans recruited

Open Advertisement with e-enabled process

4 Bridging Technology Gaps

Product development

PMs R&D commercialisation, R&D expenditure, Patents

Collaborative projects with leading institutes, Internal R&D, Hydro efficiency improvement plan, Joint Bidding.

5 Capacity enhancement

Augmentation and Modernisation

Head MOD/ WEX / P&D

Capital Expenditure, No of machines upgraded

Capital Investment plans Retrofitting and Renovation

Process outsourcing

PMs Personnel expenses as % of T/O

Outsourcing of non critical processes

Lean Management

Head SCR, TPTN Physical TO, OTIF, Warranty, First pass NC

Partnering with Mckinsey

Fig. 2.9: Critical success factors and key processes for 2007-08

year in „Manthan‟ along with key processes which are based on strategic plan and the annual plans. For example, at national level, a power generation capacity addition of 78000 MW during the XIth plan is envisaged thereby opening up huge opportunity for BHEL. Thus, capacity augmentation (Fig 2.8) became one of the long term critical success factors for the organisation and the unit. In view of the high projected CAGR for Hydro, Transformer and Electrical Machines expansion of facilities in existing blocks and new manufacturing blocks have been set up for state of art manufacturing facilities.

The following long term CSFs have been identified in strategic plan 2012 of the unit: Filling Technology gaps in engineering New Product Development Capacity Augmentation of Hydro / Transformer / Motor Retaining/ Lateral Induction of skilled manpower in High-tech area. Debtors minimisation & Inventory optimisation through Lean Manufacturing practices Improved Material handling system

In order to meet the challenges i.e. CAGR of 20% and Profitability as enunciated in Strategic Plan 2012, CSFs were identified for year 2007-08 in „Manthan 2007‟ (Fig. 2.9). Product/ function specific CSFs are also identified by respective product/ function groups in group wise workshops e.g. CSFs of EM group for 2007-08 were De-bottlenecking, new product development, cost reduction and capacity enhancement. Similarly CSFs for Hydro group were modernisation, strengthening of engineering capability, vendor development and technology upgradation. The CSFs for P&D group were uniform turnover, engineering excellence and capacity enhancement.

Capital Investment Planning: Five year Plan and Annual Budget

In line with the growth objective set in the strategic plan document, BHEL, Bhopal makes an assessment of product-wise resource requirements and prepares investment plans.

Five year Plan of the company constitutes the preliminary programme of budgeted investment. These investments are planned against various categories viz. schemes under implementation, new schemes to be taken up, science and technology, modernisation and welfare facilities.

Policy and Strategy


Annual Plan Formulation of annual Investment proposals involves a detailed study in respect of identification of need for investment, market demand analysis, technological justification, equipment wise investments, plant layout for the product looking at the present scenario and future, additional associated investment in infrastructure, water and power, etc. The report carries out a detail financial viability analysis. Risk factors are considered by developing alternate scenarios and sensitivity analysis of investment proposals.

Capacity Augmentation Plans based on the needs of the organisation are in various stages of completion (Fig. 2.8).

The major policy initiatives of last three years are given in Fig 2.10

2d. Communication and Deployment of Policy and Strategy through a framework of key processes:

BHEL, Bhopal is a strong process-oriented organisation. Standard operating processes are documented as various function-wise Management Instructions (MIs), Departmental Working Instructions and Technical Documents such as Product Standards, Process Specifications, Technology document etc. A measurement system of all the processes in terms of key performance indicators, KPI is also documented in the MIs. Trends of KPI are regularly monitored in various review forums (Fig. 1.16). The Key Performance Indicators were reviewed and revised in April‟08 by system task forces and approved by Apex TQ taskforce. The evaluation of effectiveness of key processes is done by the process owners through monitoring of performance parameters and milestones at predetermined intervals viz. During last 3 years, the reduction in cycle time (Fig. 9.15) has been achieved through strategic reduction in PI to PO conversion time (Fig. 9.16) and engineering cycle time (Fig. 9.17). During last three years a thrust was given on cash collection (Fig. 9.26), continuous identification and completion of six sigma projects and DTC /Lean, completion of collaborative projects with leading institutes and engineering excellence. In order to build a commitment towards the BHEL Vision, Mission, Values, slogan and Bhopal Unit‟s strategic objectives and plans there is a well established communication system in place for relevant information to all stakeholders. The highlights of the same are given (Fig. 2.11).

INITIATIVE ISSUES MATURITY LEVEL

Daily Works management Uniform Production Matured

Six Sigma Improvement in processes Matured

Lean Capacity augmentation Matured

DTC Cost competitiveness Matured

ISO 9001, ISO 14001, OHSAS 18001, U-Stamp Quality Systems in place Matured

Facilities Modernisation /Upgradation Technology Upgradation Matured

Top Management Summits - Manthan CSFs, Critical Issues Matured

BEAT (Bhopal Excellence Award Trophy) Functional Business Excellence Matured

OEE Availability enhancement Matured

Inventory Control Inventory Reduction Matured

External Customer Perception Survey (M/S CSMM, M/s Metrics) Customer Feedback Matured

Project / Contract Management groups. Customer Focus Matured

Balanced Unit/ Departmental Score Card & Action Plans / Pole Star

Performance Targeting & Improvements Matured

On-line Focused Performance Planning, & Review (e-Map) Executive Performance Matured

Product based Reorganisation of MM Function Material Cost Reduction, Material availability Matured

Product Material Directories(PMD) Vendor Selection Matured

IMPRESS / Suggestions Scheme Employee motivation for improvements Matured

B2B Portal for Suppliers / Long Term MOU with Vendors Vendor Partnership Development In place Matured

Cost of Rework & Rejection Non Conformities Matured

IT Initiatives – Functional Web Sites, On-line information, e-transactions in place Being improved

Benchmarking Product benchmarking Being improved

Engineering excellence Patents & copyrights, collaborative projects Matured

Capital Investment Capacity augmentation Matured

Fig. 2.10: Major Initiatives

Policy and Strategy


Description Frequency Facilitator Reviewed by

MCM Monthly P&D Board of Directors

Unit Highlights- DO Letter

Monthly Unit Head CMD

Balance Score Card Quarterly P&D Group Unit Head/ Corporate

Engineering Excellence

Monthly Engg Coord Unit Head /CEPD

Operational parameters

Weekly On line MIS

P&D Group PM, Unit Head

KRA Half Yearly Appraiser Reviewer

Excellence Initiatives Milestone Dates Process owner Unit Head

KPIs Monthly Function Head GM

Fig. 2.12: Reporting mechanism

2002-2004 2004-2006 2006-08

System of Balanced Score Card reviewed and refined

Score Card and Excellence Plans Integrated

Strategic Divisional Plans-revisited E-MAP refined and KRAs rationalised

System of Balanced Score Card integrated with KRA

Six sigma implementation IMPRESS across all functions Collaborative projects with leading institutes Outsourcing of non core processes Design to cost (DTC)

On-line Recruitment process Capacity augmentation BSC extended to HOS level DTC extended to more product groups LEAN introduced Six sigma second phase Evaluation of BSCs by Committees


Fig. 2.11: Communication of policy and strategy

The Unit BSC is derived from the corporate BSC. The targets for the Unit BSC are agreed upon after discussion with respective corporate functions and are jointly signed. Further, the Unit Balanced Score Card is cascaded upto the individual level through the Product/ Functional BSC, HOD/ HOS BSC and the framework of e-MAP. Individual KRAs are agreed upon between appraise and appraiser at the performance planning stage with a provision for mid year review. This three tier arrangement ensures alignment and integration of individual goals and targets with the organization‟s business plans and strategies. A systematic reporting mechanism (Fig. 2.12) ensures that the various plans are continuously tracked and reviewed.

The approach of development, review, updation and communication of Policy and Strategy is continuously reviewed and improved (Fig. 2.13) by P&D group and the Business Excellence group based on the performance reviews and inputs received from employee perception surveys. This has resulted in positive change in employees‟ perception over the years (Fig. 7.1a) on this parameter.

Corporate values, vision, mission statements are widely displayed through posters and circulated through BHEL diary, pocket cards and publishing in house journal “Sandesh”. These are also available on Central Planning and MBE website.

Strategic Plans, MOUs, Balanced Score Card and excellence plans of all levels are available on Central Planning/ MBE Website. Strategic Plan of Corporate and Unit are personally shared by ED / GM(P &D) with all Executives during his annual address. All employees are made aware of the Unit Balanced Score Card through display boards and booklets. Targets, achievements and various performance indices are displayed through CRISP (Company related information sharing program). Three Year Rolling Plan and annual Budgets are made available to Respective product groups. All individual goals and targets are available as KRA on desktop through e-MAP Information on business plans and relevant initiatives like Six Sigma, DTC, product developments, possibility of joint projects are

communicated to customers during customer meets. Information on business opportunities, new product developments, need for import substitution is given to vendors during vendor meets. Supplier related information viz vendor rating, payment status, material acceptance status etc on B2B website Information on achievements, plans, CSR initiatives, etc through EDs press conferences and regular press releases by P&PR

Global Market Domestic Market Unit BSC Corporate BSC Annual Budget Capital Investment Plan

Three Year Rolling Plan -

Broad Objectives



Strategic Divisional Plan Product Plan GM BSC

People


Fig. 3.0: HRM Polestar

To ensure availability of competent, motivated and effectively contributing human resources and to facilitate achievement of full potential of employees at all times to realize organizational

mission

3. PEOPLE

3a. Planning, Managing and Improving people resources:

The HR philosophy of BHEL has its root embedded in Company’s Vision, Mission and Values (Fig.O-2) and HRM Polestar Statement (Fig 3.0) and is enshrined in the HR Manual HR policies, HR Plan (Fig 3.3) and HR BSC. The first HR manual was documented in 1976-77 after due deliberations of CFTs constituted for this purpose. Since then four editions of HR Manual have been issued, to include current policies and guidelines for HR management. The fourth edition was issued in 1997 and since then the manual has been made available online on the intranet and is updated continuously. HR Strategic Plans are prepared every five years, in line with the Company’s Strategic Plan. The Unit reviews issues in participative manner and gives feedback to Corporate HR to bring about improvements in HR policies.

HR strategies are triggered from objectives set in Strategic Plans, discussions and deliberations in three tier bipartite forums and discussions during MCM & HR Heads meet and unit level apex forums (UBC). The strategies are formulated both at corporate and unit level through deliberations in high level CFTs constituted specifically for the designated objective. The major strategies adopted during recent years are given (Fig. 3.1). HR processes (Fig. 3.2) are periodically reviewed based on the need of the organization and feedback from employees and environment. Manpower requirements are worked out depending upon competency gaps. The process of recruitment is elaborated in HR Manual. During the last decade, the recruitment was done selectively to rationalise manpower through planned reduction i.e. natural wastages and VRS. Now to build up skills in line with present and future requirement of expansion and capacity enhancement (Fig 2.8) and to maintain its optimum level, recruitment has been identified as key process for the organisation. In line with the objectives of HR Strategic Plan (Fig. 3.3), recruitment is being done only for strengthening the core activities while non-core activities are being outsourced in phased manner. Retainership of retired employees and lateral entry is sought as and when required. Recruitment being identified as a key process, (Fig. 2.9) it was reviewed by GM(HR) and a need was felt to further strengthen it in terms of the elements of timeliness, fairness and transparency.

Source Team Direction Strategies

Perspective 2002

CFTs with representation of Bhopal units formed

17 thrust areas identified. Decided to focus on 7 area

PMS , VRS,

Benefits & Incentives

SP 2002-2007

Corporate CFT, senior executives from Bhopal unit

Reviewed HR Policies

Focussed VRS, e-MAP

Excel Awards& Impress

HR Plan 2012

Corporate CFT, senior officers from Bhopal unit

Thrust areas identified A rolling plan for meeting manpower requirement in next two years, considering anticipated outflow

Categorisation of core and non core areas

Rational changes in Incentive and Reward schemes

Review of HR systems and procedures to realign HR processes (SAP HR, PCMM )

Improving motivational level of employees

JPC

Employee representative & Management (syndicates formed to address various identified issues )

Production related issues Man power deployment for (24x7) for critical machines

Multiskilling, Core non core processes

Strengthening Bipartite fora Communication

Redeployment

Enhancing productive time of man and machines

Utilisation of critical machines

Daily works Management

HRD Council

ED, GMs, GM(HRDI), Outside expert

Integrating HRD activities with business needs

ET’s training to be strengthened

Assessing the motivation & commitment levels

HR specific issues emanating form SP

Fig. 3.1 : HR Strategies

People


Core / non-core categorization

PP payment with linkage to BSC

Reconstitution of Joint Committee

Assessment of “Motivational levels”

Lateral recruitment in specialized areas

Employee benefits ( differential based on performance & what the employee values)

Corporate Social responsibility

Career management ( movement to key positions

Strengthening HR competencies

Fig. 3.3: HR Strategic Plan 2012

The salient changes introduced in the recruitment process include the following:

Online recruitment of artisans. Bhopal Unit is the first amongst all BHEL Units to adopt this process.

Results of both written test and interview announced the very next day. BHEL Bhopal is the first amongst all the PSUs to adopt this practice.

Higher cut-off at various stages (application, short listing for entrance test/personal interview) to attract best talent

BHEL Bhopal has a full fledged Human Resource Development Centre (HRDC) which also includes skill training workshops, computer labs etc. A structured process of induction training for all levels includes class room training, rotational training, on-the job training, visit to customers, sister unit visits, industry visits etc. The training also includes regular evaluation through module tests, project completion followed by exhaustive absorption test. Meritorious trainees are suitably rewarded. Effectiveness of induction training programs is assessed through structured feed back. The analysis is shared in HRD Heads meets presided by Director(HR) and course corrective actions are taken to improve the process e.g. “Dakshta” the training module for ETs has been revisited and revised. With the aim of creating a sense of belongingness amongst the new inductees who are at a stage of transformation from an academic institute to organisation, a new mentoring scheme has been introduced for ETs. It is targeted to mentor 100 ETs in the current year. The mentors are executives of E4 to E6 level who have voluntarily committed their services under this scheme.

Process Objective Earlier Process Present Process

Recruitment

To ramp up manpower as required in core areas in a timely manner as per business requirement. Ensuring fairness in recruitment process.

Trainees at workmen, supervisor and executive levels Recruitment of Specialists. Manual Recruitment process .

Identification of core / non-core area

Retraining/ redeployment -non core to core areas

Timely recruitment & induction

E-enabled on line recruitment of artisans

Lateral recruitment for desired competencies

Training and Development

Building competence to suit changing business needs as reflected in the e-MAP and other business initiatives Process improvement training

Primarily induction training for skills Function based inputs

Competency needs identified through e-MAP

Up gradation of functional skills

Multi-skilling and skill up gradation

Process improvement training like DTC & Lean.

Introduction of PCMM practice

Performance Management

Aligning individual goals to organizational goals, planning and evaluating planned performance

Annual confidential reports Then PMS

Balance Score card

Performance Management system e-MAP

Review of systems of Career & succession Planning (Job rotation, transfer & promotion)

Rewards and Recognition

Recognizing high performers, motivating people to excel

Recognitions thru’ cash awards, certificates

Criterion-based, transparent schemes (Awards of substantial value, e.g. Excel Awards, Impress)

Increasing variable component of pay

Reward Scheme 2008

BHEL IPR Incentive Scheme.

Compensation & benefits (post retirement)

Attracting, Retaining & rewarding talent

Salary as per BPE / PSU norms, statutory bonus

Package based on comparable undertakings with additional perks reimbursements of varied types, post -retirement benefits.

Rationalising performance related rewards. Linking to BSC. Differential benefits based on performance

Review of system of welfare. Customised mementoes for retired employees, increase in amount under various schemes for eg. GIS .

Communication To involve employee to enhance their motivation

Memo’s & Circulars CRISP, MECOM, Intranet, E-mails, special functions

Fig. 3.2: HR Processes

People


Improvement in work environment - Holistic approach towards providing an contemporary working. Done in three blocks and is being extended

Training & Re-training - Competency training of managerial & behavioural training, multi skilling training.

Target Setting & Appraisal - Review on minimum no. and weightage of KRA

HOD/ HOS BSC . Behavioural ratings

Rewards & Recognition - Differential benefits based on performance, rewarding through Impress. Reward scheme, IPR Scheme

Communication - Communication in various forms to be strengthened. MECOMs to be strengthened.

Fig. 3.5: FGD (2007-08)

Online-Employee Centric Information on intranet & touch screen kiosks.

Working through CFTs Modernisation of annexes Audio Video conferencing facility E-MAP, KRAs , Balance Score card Establishing Centre for Excellence Mobiles provided to executives

Fig. 3.6: Improvement in Working

Survey Design

Survey Administration

Results

Analysis

FGD

Action Planning

Fig 3.4: EPS Process

Career Development is taken care of through a system of time cum merit-based promotions at all levels and it provides for job enrichment and job rotation. The entire career development system is reviewed at corporate level in the MCM and considering the business scenario and future requirements changes are made and communicated to all employees. This year in line with the feedback and aspirations of employees the temporary period of service in case of workers joining as DR/CW has been reduced to 1 year from 2½ years. Similar approach has been adopted for select

grade of supervisors, wherein one year weightage in promotion has been granted. The promotions percentages at various levels are revised every year and depending on the Unit’s performance and organisational requirements, the promotional avenues are decided.

The HR manual documents the policies with respect to employment, perks and benefits. There is no distinction in remuneration, opportunities and no difference is made in allotment of jobs or terms of payment based on gender, religion or caste. The benefits such as loans, advances, accommodation in township etc. are given as per norms and transparency is maintained. The welfare benefits such as medical, canteen, transport, subsidies etc. are available equally to all. Pay packages and benefits are evolved through deliberations in three tier bipartite forums and anomalies are settled expeditiously.

A Grievance procedure is in place to handle representation from employees. The data (Fig. 7.6) indicates prompt handling of grievances.

BHEL Bhopal has three tier participation of workers- Joint committee at Corporate level, Plant Committee at Unit level and shop councils at shop floor levels. Quarterly interactions are held between HR and the employee representatives to discuss issues related to production optimisation and employee involvement. (Fig 7.10)

The Employee Perception Surveys (EPS) are being carried out periodically (Fig. 3.4). The questionnaire has been reviewed and revised in 2000, 2003 and 2004. Focussed Group

Discussions are held with a cross section of employees on issues of concern emerging from the survey (Fig. 3.5). As a result of various actions taken (Fig 3.6) as sequel to surveys, there is a perceptible positive shift in employee’s perception over the years (Fig. 7.1a). The approach for perception survey was reviewed in 2006 and in order to allow initiatives taken as sequel to previous survey to mature, it has been decided to conduct survey once in two years. The methodology of capturing people perception was further reviewed and a decision taken to get the perception of cross section of employees on various HR initiatives through dip stick surveys (Fig 7.3). The results of dip stick surveys are analysed by Unit HR and a detailed feedback is also given to Corporate HR. Apart from the people perception survey, the forums (Fig. 1.16) provide useful feedback for improvement in HR plans.

In line with the HR Strategic Plan 2012, all the departments have classified core and non-core activities and the non-core activities are being progressively outsourced including that of engineering divisions (such as drawing management, indenting etc.). The concept of Lean management has enabled the use of innovative methodology such as visual management, kitting methodology etc.

3b. Identification, Development and Sustenance of People Knowledge and Competencies:

The process of identification, development and sustenance of the knowledge and competencies of the employee starts with the time he/ she enters the organisation and it continues throughout his service span. Identification, development and sustenance of people is a two way process (Fig. 3.7).

People


Program Categorisation Tool Level of Evaluation

Programs-more than 5 days Format Self & superior

Competency Development Programs

Format Self & superior

Program less than 5 days Format At the end of program

Training on live project Degree of implementation

At each stage of training

ETs Examination After each module

Mass awareness NA No effectiveness assessment

Fig. 3.11: Training Effectiveness Evaluation

Fig. 3.8: Facilitation for Learning

Membership fees of professional bodies

Reimbursement of cost of news papers

Magazine allowance introduced for executives

Nominations for National & International seminars

Reimbursement of internet expenditure

E-mail access & Internet connectivity

Product based portals

Full fledged technical library & departmental library

Fig. 3.7: Managing Employee Competency

Identification of competency

Induction e-Map

T & D Career Progression

Competency sustenance and development process is continuously being improved based on feedback on discussions and deliberations in HRD heads meet e.g. managerial and functional need for training and development is also now being captured through e-MAP system and accordingly thrust is being given to managerial and functional competency development. The training programmes are designed to include workshops and team building through management games. The method of providing the training is also reviewed and new methodologies are introduced e.g. adventure sports based program module for team building workshops, Knowledge workers etc. The Modules imparted are periodically reviewed for improvement by HRDC and also at HRD Heads meet.

Leaders promote learning culture through self participation, acting as faculty and providing resources for same (Cr. 1a). BHEL, Bhopal facilitates continuous learning (Fig. 3.8), adopts new approaches (Fig. 3.9) and encourages the employees to upgrade their knowledge and professional competency in many ways (Fig. 3.10). Employees are regularly sent abroad to learn and absorb new skills and knowledge for keeping abreast with latest technology (Fig. 7.3c).

The need of optimum utilization of manpower led to the concept of multiskilling the existing workforce in 2004-05. Further refinement of the approach has been done and now the inductee artisans are also being multiskilled by training them at ATIs. The concept of knowledge worker was introduced in 2005-06 with a view to educate artisans on the impact and implication of their work on customers. In order to ensure the assimilation of knowledge through training, the system for evaluation of training effectiveness is in place. Different approaches for evaluation of training effectiveness are deployed for different programs (Fig. 3.11). This helps HRDC in reviewing the course content, duration, course material, lectures etc.

The HR database of employee profile with qualification details, training details and work experience is used for HR management and planning job rotation. Job rotation at inter and intra departmental and function level is periodically done (Fig 7.12). Considering the job requirements, the employee

Initiative Objective

Knowledge Workers Understanding implication of own work on business.

Multi skilling for inductee artisans

To make them competent on work related skills.

Leadership for excellence Training the Leaders

Program for Transferee Executives

To equip with relevant knowledge skill

Training Evaluation Assess effectiveness of inputs

Functional programs Functional skill enhancement

Fig. 3.10: New Initiatives in T & D (2007-08)

Approach Focussed Input Unique Feature No.

Covered

Process Improvement Approach

Six Sigma

DTC

LEAN

Partnering with

ISI

Mckinsey

Mckinsey

180 32 60

Skill enhancement approach

Knowledge Workers / Multiskilling

Merging classroom and workplace learning

4322

Fig. 3.9: Approach adopted for T & D

People


possessing the requisite skills are assigned the job, thus providing opportunities for development. Employees are given adequate responsibility and authority which increases as one progresses through hierarchy. The HR database has been integrated through SAP HR initiative for prompt analysis and triggers for fact based decisions and for elimination of routine manual processes. This has enabled HR to reach out to internal customers for their requirements on real time basis and also play an increasing role as strategic partner in the business. Similarly with PCMM (People Capability Maturity Model) being a part of HR Strategic Plan (2007-12), the Unit is gearing up to address its requirements with HR executives being trained for implementation of PCMM. This is also a strategic objective in Unit BSC 08-09.

Opportunities are provided to employees to develop allied skills. Other than the core job, allied areas are also assigned to individuals which broaden the horizon of individual’s growth eg. lead assessors for ISO:9001, assessors for TQM, NABL, OHSAS, ISO14001, members of various committees for BIS, members of QC, CFTs, assessors for CII EXIM Award etc. (Fig. 1.4) Training in concepts requiring team working like participative management, quality circle, shop council etc. is imparted and the concepts implemented. Team spirit is also built up through participation in socio-cultural activities viz. Kamyabi and Milap Melas, tree plantation etc.

A Structured process of setting and cascading targets is in place (Cr 2c and 2d). HODs and HOS plan through BSC while all other executives develop a performance plan as part of e-MAP process in line with organisational requirements and targets (Fig. 2.6). The frame work of BSC and KRA enables the alignment of individual and team objectives with the organisational objectives. Mid term review of BSC and eMAP provides feedback to individuals and helps in taking corrective measures. The methodology of evaluation of HOD/HOS BSC was revised this year and modified. The self assessed BSCs are now evaluated by Committee formed at different levels and performance scores are introduced in eMAP. The shop supervisors and workers contribute for the attainment of weekly and monthly section targets through production planning and the DWM process. Performance feedback on daily basis is provided to the shop supervisors and the workers by the concerned Shop In-charges and course correction is taken. The performance appraisal of supervisors and workers is done through ACR and they are given the feedback if their performance falls below specified levels. The BSC/ eMAP evaluated scores are agreed upon between appraise and appraiser. Further a provision exists for request for review of final scores of BSC/eMAP awarded by reviewer.

Developmental competencies are identified by appraisee in consultation with the appraiser and reviewer in tandem with the competencies required for effective discharge of the key performance areas jointly. HRDC and HRDI organises training on these developmental needs.

eMAP system and KRA’s are reviewed annually by 24 task forces and improvements brought about (Fig. 3.12). The updating of individual and team objectives, based on departmental targets, continuously takes place through structured reviews viz. In weekly review meetings of Product Manager, the performance of each section is reviewed and course correction is initiated.

3c. Involvement and empowerment of people:

The delivery process of BHEL Bhopal products calls for team working at all levels of various processes such as engineering, manufacturing, testing, despatch etc. Further, BHEL Bhopal being a process oriented organisation the concept of CFTs working is encouraged for day to day working, problem resolution and improvement programs. As such HR management lays emphasis on team building programs (Cr. 3b). Forums/ initiatives such as quality circles, IMPRESS, Six Sigma, LEAN, DTC, RCA, PQC, PQG, DRC etc provide opportunities for team involvement at all levels (Fig. 1.4, Fig.

2003-2004 2004-2005 2005-2006 2006-2007 2007-08

-KRA process revised -Capability building KRAs, Operational KRAs, Functional Critical KRAs, Functional Support KRAs

-KRA Masters Created -Concept of Mother & Child KRA brought in

-Min. No. of KRA reviewed & reduced to 6 -Max weightage increased to 25 -E-Map Champions -System of capturing KRA measures.

-Concept of Stretch tool introduced -Identification of developmental needs during mid year review.

BSC evaluation method reviewed and modified. Rating on behavioural traits Provision for review of final scores

Fig. 3.12: Development of Appraisal System in BHEL

People


1.5) thereby promoting collective decision making. This CFT approach enables team building and co-problem solving. The involvement of workers in Quality Circles shows a positive trend (Fig. 7.5b) as a result of thrust given in top management reviews, motivation of area co-ordinators through introduction of best area co-ordinator awards in 2005 and increase in value of memento given to members of active Quality Circles (Fig. 7.5b).

Six Sigma has been initiated in 2005-06 and since then 100 black belts and 80 green belts have been developed and have undergone training of 14 mandays and 5 mandays each respectively. The leaders and team members for six sigma projects are selectively picked up by the respective product/ function managers as change agents within the respective areas. In the process HODs are involved as Companions and team members are awarded green belts.

Web enabled IMPRESS launched in 2004-05 with an objective of integration of all improvement initiatives, transparency of reward process, empowers the individuals and teams to take up improvement projects and register the same for rewards based on predefined criteria. As a sequel to review of participation levels and number of IMPRESS projects, the evaluation process has been decentralised and number of evaluation teams increased to fifteen from one earlier. This has been done to facilitate the evaluation by respective experts of product/ function group and also to speed up processing. With this improved process aggressive targets have been set for current year. Employees at all levels are extensively involved in improvement programs through self directed teams such as DTC, LEAN etc. (Fig. 1.4, Fig. 1.5). The entire movement of Business Excellence is steered through Business Councils concept (Cr 1a) both at unit level and product / functional level. Seventeen BE leaders representing all products and functions who are selectively chosen and trained on business excellence model steer the business excellence movement throughout the organisation. These leaders undergo refresher training programs at periodic intervals. Executives at individual level are involved in improvement programs by virtue of various allied assignments (Cr 3b). Almost all the executives are involved in one or the other CFTs. Suggestion scheme provides platform for individual involvement at all levels. This has been re-juvinated by introduction of token cash incentive on submission of suggestion which has led to ambitious target setting for the current year. JIPs with customers and suppliers provide co-creating opportunities. Joint improvement initiatives taken up with corporate R&D, corporate ARP, various institutions like IIT, IISc AMPRI, etc. also provide opportunities for co-creation. e.g. BHEL teams have worked with various consultants such as Hewitt for emap, TCS for SAP-HR, McKinsey for DTC/ LEAN etc.

Policy guidelines and manuals such as Quality manual, MIs, DWIs, HSE Manual, Purchase policy and Delegation of Powers define empowerment of people. These are periodically reviewed and revised. The recently introduced Reward Scheme aims to encourage not only the individual excellence but also group dynamics and spirit of team work. The Scheme has two parts; part one being aimed at involving the individual to excel in his performance while the part two involves the whole group to accomplish targets with team spirit.

The Company encourages and supports people involvement through in house conferences, ceremonies and community projects. Large scale involvement of employees in all celebrations like mass plantations, Kamyabi Mela, cleaning of the Upper lake of the Bhopal city, Golden Jubilee celebrations in 2006 etc. are all a testimony of the efforts in this direction. Ex-CEO conferences provide opportunity to learn from leaders of yester years.

Employees through employee representatives and associations are involved in framing important schemes and policies e.g. employee representatives were called for their suggestions and their inputs played an important role in framing the Reward Scheme 2008.

Mini Joint Committee Meetings are held at Unit level prior to meetings of JC at Corporate Level so that the needs and expectations of employees of the Unit can be properly captured and taken up at Corporate Level. Mini JPC is also held periodically to communicate achievements, concerns and the strategies to be adopted. The Company provides opportunities for stimulating creative and innovative behaviour. In order to motivate employees to strive for patentable inventions, BHEL IPR incentive scheme has been

People


Communication Needs

Managed by

Media of communication

Business related P&D PMs

Access controlled intranet ED, GM(P&D) address to the unit, CRISP,LEDs, Daily/ weekly communication meeting etc

Employee centric

HR Though employee representatives Intranet, touch screen, bipartite fora, Sandesh, MECOM, SMS etc

Fig 3.13: Categories of communication Needs and Media

introduced where in cash rewards are given for registration/ award of patents and copy rights. This has resulted in substantial increase in the no. of patents filed (Fig. 9.45).

Employees participate very actively in various competitions organised by Rajbhasha, Quality, Safety, Productivity, Business Excellence and other departments where they show their creative ability in various forms. All this has resulted in a culture of working together in teams 3d. Dialogue between people and the organisation: The employee communication needs are identified based on feedback from surveys, structured bipartite and other forums (Fig. 1.16). The needs are categorized and communication means determined for effective and meaningful communication (Fig 3.13).

ED and GM (P&D) communicate business plans and achievements to all employees at the beginning of the financial year. These are also shared with employee representatives and supervisor and executive associations. The business plans including strategic plans, annual budgets, quarterly production programs, monthly programs are communicated through access controlled intranet. The monthly and quarterly achievements are shared and communicated through shop councils at product level and joint plant council at unit level. A very strong media for all communication is through intranet which addresses most of the business related as well as employee centric communication needs. Home pages of various departments are also an important source of information. The process has been further refined and in order to enhance the depth of communication CRISP boards have been introduced in 05-06 for communication of monthly plans and other critical issues such as customer feedback, MCM feedback etc. to all employees. Each product manager has assigned a process owner for updation of CRISP Boards. CRISP Boards are being gradually replaced by plasma screens and LED displays. The learning from LEAN has lead to adoption of visual display boards and ANDONS for operational targets and performances.

BHEL Bhopal has a structured three tier bipartite mechanism for dialogue on employee centric issues. Joint committee at corporate level, joint plant council at unit level and shop council at product / function level facilitate dialogue related to employee centric issues. The frequency, agenda and participation of these meetings is structured. All welfare and benefit related issues are mutually agreed upon in these forums. In addition, the supervisory and executive associations are involved in dialogue with issues specifically related to respective cadres. The seven advisory councils viz. PF Trust, Canteen management Committee, Township committee, Medical committee, Grievance Committee etc have representation from management and employees at all levels. These advisory councils oversee the functioning of respective areas and suggest for improvement based on employee feedback. A need of direct communication by employees with top management was felt based on feedback. Subsequently, MECOM, the direct forum for communication by employees to top management was launched in 04-05 and is now held quarterly with theme based subjects. The other important top-down and bottom-up communication forums are listed in Fig. 1.16. The BHEL Bhopal intranet home page and in-house magazines/ newsletter like BHEL Bharti & Sandesh, also serve to establish a dialogue with the employees. Various schemes, congratulation messages, achievements, appointments etc. covering a very wide spectrum of issues are published in these media. As a result of refinement in various communication approaches illustrated above, there is a perceptible positive change in employee’s perception on communication (Fig 7.1a).

People


3e. Rewarding, recognising and caring people:

The remuneration package consists of mainly fixed and a variable component. A major initiative in 2008 has been the introduction of new “Reward Scheme” for individual and collective performance reward. A concept of Production Performance Index (PPI) has been introduced as a yardstick to measure group performance both in physical and financial terms. With the new scheme, the variable component of pay in respect of workers is to the tune of 20% of their basic pay as on date and for induction level workers it can be more than the fixed component of their gross pay.

The remuneration packages for all level of employees are set as per Government of India Guidelines and as per the joint decisions taken in joint committee and association meetings. These are reviewed and revised periodically to attract and retain the talent. The perks at all levels are revised and upgraded from time to time in line with HR Strategic Plan (Fig. 3.3). The Plant Performance Payment which was earlier linked to volumes, quality and delivery has also been reviewed. The PP payment is now evaluated on a broader framework and has been linked to the BSC Score of the Company. Similarly the special incentive payment linked to profit and turnover growth and given to all levels of employees has been reviewed and increased substantially. Both SIP and PP have been made differential in order to retain the talent at higher grades for whom the opportunities are opening up. There has been a quantum increase in the PP and SIP amounts over the last two years (Fig 7.13a and 7.13b). BHEL, Bhopal has a well established recognition process to encourage people’s involvement in improvement activities and socio-cultural activities (Cr.1d). Some of the formal reward schemes are illustrated in Fig. 3.14. A major motivational step this year has been in the form of re-designation of employees in supervisor cadre as assistant/ deputy/ additional engineers. They now feel highly motivated with an increased self esteem as well as perceived social status. (Fig 7.3) IMPRESS introduced in 2004 enables people/ team to register and get recognised and rewarded through cash awards (Fig. 9.39b). BHEL Excel Awards Scheme introduced in 2000-01 recognises excellence on various values and initiatives such as quality, productivity, speed of response, R&D etc.

A dinner is hosted by CMD every year in honour of award winners of BHEL Excel Awards. The recognition process at Corporate Level and at unit level are reviewed every year for the criteria and inclusion of further awards e.g. Scope of BHEL Excel Awards has also been enlarged to include awards for patents/ papers presented/ published in National/ International forums. BEAT (Bhopal Excellence Award Trophy) has been introduced in 2006 to recognise holistic excellence effort at product/ functional group. The BEAT trophies are awarded annually in “Manthan”. Employees superannuating are now given a BHEL customised memento that carries their name and period of service in BHEL on a gold plated plate in recognition of their long association. A long service award depicting the loyalty and pride in the company which is one of the values was reviewed and the value of cash amount has been enhanced. BHEL values environment and always strives for its protection and improvement. (Fig. 3.15, Fig. 8.9).

BHEL Excel Awards Scheme Unit Level Awards

Recognition / reward Criteria Recognition / reward Criteria

Utkrishtha Puraskar All round excellence IMPRESS Improvement Projects

Gunvatta Puraskar Excellence in quality Quality circle award Participation & Performance mini convention

Tatparta Puraskar Timeliness & Speed of response Safety awards Least no. of accidents

Utpadakta Puraskar Productivity Zero accident award Zero accidents

Takniki Lekh Puraskar Technical Paper Best safety steward Contribution in safety activities

Anusandhan Puraskar R & D Long service award 10 yrs. Of service

Srijanatmakta Puraskar Creativity & innovation Vishwakarma day award Best “Jhanki” on the declared theme

Grahak Santusthti Puraskar Customer service Suggestion awards Accepted suggestion

Paryavaran/Samaj seva / Sanskriti / Khel Puraskar

Contribution to environment, culture & society

Gunta Karmi Contribution to quality

Swasth Karmachari Good Health

BEAT Award Group business excellence

Reward Scheme 2008 Individual and group performance

IPR Incentive Scheme Patent filed and granted

Fig. 3.14 Recognition & reward schemes

People


Fig 3.15 Practices for healthy Organisation

ISO:14001 and OHSAS 18001 certification

Trg. On Prevention of Aids

Trg. On First Aid’, Stress Management’

Environment Management Systems

Training of people working in hazardous areas

Factory & Hospital are No Smoking Zone

Yoga Awareness Centre

Sports club

,

Fig Fig 3.18: Improvements as a sequel to A & R

Fig. 3.16: Caring Components

Pension, CPF & Gratuity

Maternity/ Paternity Leave

GIS/ GSLIS/EDLI

Education fee

Holiday home

Loan Subsidy

Fig. 3.17: Amenities in Township

5 community centres

11973 residential quarters

Shopping centres, Libraries

Schools and Colleges

Theme based parks

Places of worship

Co-operative Society

Yoga Centre & Sports Club

The awareness on related systems, implementation status and future plans is created through posters, banners, training programmes, essay competitions and lectures by eminent persons. Presently, over 200 executives representing all product and functions are involved in development, audit and establishment of Environment Management Systems. Every year, over 500 employees are trained in safety-related issues and an equal number in health awareness programmes. Positive effect of awareness on safety is evident from data on declining accident rate (Fig. 7.7). Hazardous areas have been identified in the plant and specific training inputs are provided to the employees working in these areas. Kasturba hospital -a 350 bedded hospital is ISO 14001 and OHSAS 18001 certified, is recognised by Indian Medical Council and empanelled for VVIPs. It has four peripheral dispensaries which cater to employees and their dependents. For specialised treatments, patients are referred to hospitals like Apollo, AIIMS, Escorts etc. and even abroad, if needed. A well-equipped and modern Occupational Health Services (OHS) Centre is operational inside the factory to meet the medical requirements within the Factory premises. As a major step towards care for people, employees undergo preventive medical check up at regular intervals. The examination is well planned and monitored through a roster wherein employees are medically examined department wise on scheduled dates. Awareness on Prevention of AIDS is provided in all training programs organised by OHS. Benefits administered to employees facilitating their general well being are illustrated in Fig. 3.16.

BHEL, Bhopal has a full-fledged township (Cr. 8b) with all the amenities (Fig. 3.17).

As a major benefit the amount paid under Group Insurance Scheme has been increased 20 times from an earlier range of Rs 10000 to Rs 50000 to a range of Rs 2 lakh to Rs 10 lakh. Beside the statutory schemes, a gamut of schemes ranging from insurance schemes, accident schemes beyond duty time, death relief funds etc. exist in the company. To support the working parents, BHEL, Bhopal has established a crèche inside the factory premises. Medical facility to retired employee is at par with the serving employee. Retired employees are entitled to retain the company accommodation at subsidised rates for a specified period. The club and community centres are also available to them at the rates applicable to serving employees. The well equipped Sports club is recognised by SAI. BHECNIS is the apex body for promotion of social and cultural activities. A Labour Welfare Supervisor is deputed every Sunday at EDs residence to look into the problems raised by the retired employees/ widows and wards of deceased employees. “Änandam” an old age home set up by company is a unique initiative towards employee care. Various HR approaches are reviewed from time to time based on feedbacks and various results obtained. Various improvements as a sequel to assessment and review are illustrated in Fig. 3.18.

2003-2005 CFT for KRA review, Review & communication of promotion policy , FGD for low score areas of EPS & Review of EPS, Competency development programs, Impress scheme, Evaluation of Shop Councils, HR Audit, Six Sigma 2006-2007 Knowledge Workers, MECOM Meeting, Evaluation of Training effectiveness, 360 degree feedback, Assessment of Competency Identification of core / non core functions, retraining & redeployment of suitable manpower from non core to core areas, functional competencies training, providing mobile to all executives. 2007-2008 Development of a rolling plan for meeting manpower requirements in next two years considering anticipated outflow Rational changes in Incentive and Reward Schemes




Partnership and Resources


4. PARTNERSHIP AND RESOURCES

4a. External partnerships are managed:

In line with company‟s strategic objectives partnership opportunities are identified both at corporate and unit level. The need of entering into partnerships which shall be beneficial to more than one unit are identified by concerned business groups/ functions and approved by Board of Directors. e.g. In line with the nations objective of “Power for all‟‟ by 2012 and analysis of the present capacities, BHEL took an initiative of entering into partnerships with major customers namely NTPC and NPCIL through JVs for harnessing core strengths. The need also led to acquisition of BHPV, Vizag which has now enabled capacity creation in the field of fabrication thus bridging the gap of approximately 10% of total fabrication requirement. Similarly, partnerships are entered into for support processes also, such as with TCS for SAP HR, Hewitt Associates for performance appraisal and McKinsey for capability building initiatives.

At the unit level, BHEL Bhopal enters into strategic partnerships with world class organisations to enhance the core strengths of the organisation in the area of engineering and manufacturing. Partnership opportunities in line with CSFs are identified at product level in Product/ Technical committee meetings to bridge the technological gaps. Strategic partnership opportunities are also identified at unit level in the UBC and product specific partnerships are entered into. (Cr 2c) The value maximisation is accomplished by combining strengths of partners to create a better product or to increase the market share as below: Business sharing agreement with M/s Strukton Systems Netherlands for transportation business. Against specific requirement of POWERGRID for the largest rating 500 MVA, 765 kV HVDC

transformer, BHEL has partnered with Siemens wherein the design strength of Siemens and manufacturing capabilities of BHEL are being leveraged. Similarly, partnership agreement has been signed with POWERGRID for field trials of 765 kV transformer and reactor.

Collaborative projects with leading institutions like IISc, Bangalore and IITs are taken up for in-house product developments as a part of capability building exercise.

Examples of key partnerships in line with CSFs and other focus areas are illustrated in Fig. 4.1.

To achieve cost reduction DTC has been identified as a key process. For implementation of DTC M/s McKinsey was appointed as consulting agency in view of their leadership position in providing similar

CSF Partners Specific Examples of Alliances / Partnership

Technology gaps in engineering

Collaborators M/S Toshiba for Koldam project, M/S BBMB, Tala, Impsa, Turbo Atom etc- for Hydro stations, M/S Siemens-for Motors, M/S CVRDE for Gun Control Systems, M/S Easun Reyrolle for CRP, M/s Siemens for 765 KV HVDC transformer

New Product development

Collaborators and Institutions

RRL, IISc, IITs, JVs with Hitachi, Fuji, Toshiba. Joint bidding with Siemens, M/s Strukton systems Netherlands

Capacity augmentation Civil contractor Richardson & Crudas for hydro Block, ABCI Delhi for new transformer Block

Vendors M/S Tandav Laxmi, Coimbatore Power Control Technology , Righill Pvt. Ltd. for oil rigs for onsite fabrication, M/s Bharat Yantra Nigam for fabrication

Customers JVs with NTPC & NPCIL for EPC & Power Equipment, Indian railways for Complete solutions

Logistics Transporters PRC, ARC

Other Focus Areas Partners Specific Examples of Alliances / Partnership

Improvement in Quality & Systems

Inspection Agencies and Consultants

M/s ISI, Bangalore for Six Sigma, M/S BVQI for ISO 9001, M/S DNV for ISO 14001 and OHSAS 18001, M/S Llyods for ASME U Stamp, M/S CII for MBE, M/S Metric Consultancy for Customer Satisfaction

Knowledge enhancement Research Labs Corporate R &D , Corporate ARP, M/S NPL, RRL, IISc, IITs etc.

DTC, Lean & Six Sigma Consultants M/s Mckinsey Consulting, Indian Statistical Institute

HR initiatives Consultants M/s IIM- A for AMP, IITs for technical training, M/s Hewitt Associates

Communication Service Providers M/S BSNL,

Supply Chain management Transporters and service providers

MOU with M/S SAIL for Steel and RC with M/S Sterlite, Hindalco, HCL and Metal Manufacturer Australia for Copper, Rate Contracts with vendors and transporters etc, e-auctions with M/S MSTC

Finance Financial Institutions M/S SBI & IDBI- for all payments, M/S HDFC Bank & Standard Chartered Bank -for LC payments

Informatics Consultants M/s CMS for Networking, M/S Cat Solutions for Drawing Management, M/S UGS for Design Automation, M/s STQC for ISMS, M/s KLG system for Primavera, Autodesk

Equipment Maintenance Suppliers and service Providers

M/S WIPRO, M/s HCL, M/S HP & M/S ICIM for on site computer maintenance, M/S Jessops for Crane Maintenance, M/S HMT for Machine Tool Maintenance

Specialised Testing Laboratories M/s NPL for Calibration of Instruments, M/S CPRI and M/S KEMA for SC tests on transformers, M/S ERDA

Fig. 4.1: Strategic Partnerships



Fig. 4.2a: Supplier partnerships

Assessment by trained and certified assessors.

Classification of items- Critical, major and minor

Shift in approach -open tender to limited tender.

Annual rate contract for procurement of materials

Product material directory Concept.

Automatic Vendor Performance Rating

Feedback on performance rating to Vendors.

Fig. 4.2b: Facilities provided to vendors

Tools, checking gauges and fixtures on loan.

Special material made available.

Training on ISO, 5S, NDT techniques, welding technology

Improvement through audits at their works.

B2B portal for vendors.

Technical guidance to develop new materials and items.

Fig. 4.3: Improvements based on feedback of vendors

Electronic Fund Transfer (98%)

Material issue process

Reduction in Bank Guarantee

Supplier related info on B2B

services to leading power equipment manufacturers in the world. M/s McKinsey and BHEL CFTs together worked on the DTC idea generation, idea evaluation and implementation process (Fig. 5.3, Fig. 5.4). This has resulted into cost reduction in Transformers, Motors and Traction machines (Fig. 9.32) enabling the products to meet the competition. Similarly for capacity enhancement, Lean Management has been identified as one of the key process and M/s McKinsey has been selected as partner for implementation of LEAN in SCR and Transportation division. (Fig 5.6) Implementation of LEAN ideas have resulted into improvements like capacity enhancement, reduction in first pass non conformance, OTIF etc. (Fig. 9.32b).

To further accelerate the process of cost reduction, cycle time reduction and quality improvement, need for extensive implementation of Six Sigma approach was identified (Cr 5b). Indian Statistical Institute, ISI an identified best in class organisation having wide experience in training & implementation of Six Sigma approach in industry through out the world was chosen as the partner. BHEL & ISI entered into a handholding approach wherein ISI faculty not only trained BHEL engineers but also jointly ensured effective implementation of 130 sigma projects so far.

Material constitutes around 50% of shop turnover; as such Vendors play an important role in the supply chain. There are detailed Material Management Instructions (MMI) for vendor enlistment/ development and performance evaluation. The approach for management of supplier relationships includes identification of new vendors, vendor assessment by qualified lead assessors, initial allotment of trial code and permanent code after minimum three successful trial orders. 25 Nos. of additional vendors have been developed in 2007-08. A similar system is in place for evaluation and registration of transporters providing logistics support.

Some of the changes in approach towards suppliers are illustrated (Fig. 4.2a). The concept of online Vendor Performance Rating is in place since 2001-02 and target of graduation of C-class vendors to B-class is a BSC Objective, e.g. 22.6% vendors were graduated from C class to B class in 2007-08. B2B portal provides supplier related information and the portal is upgraded continuously based on feedback of vendors. The special facilities available at BHEL, Bhopal and also the inputs on quality concepts are provided to suppliers (Fig. 4.2b).

To reduce material procurement time and for assuring business to vendors rate contracts are entered into with regular suppliers. As an approach towards mutual development, technical and commercial terms are frozen with suppliers after discussions and decision taken to procure bulk (70-80%) of requirement from supplier at L1 (lowest bidder) resulting into savings (Fig. 9.34).

Vendor meets are held product-wise for sharing future plans and challenges and also for obtaining their feedback. Improvements in working are also identified by MM and Finance through discussions with supplier associations. In addition to this, vendor perception surveys provide valuable feedback on the expectations of vendors. In the survey conducted for local vendors in 2006, 63 out of 130 vendors responded and the average satisfaction level was 84%. The survey sought response on 34 sub-processes in seven main processes. During the 2007 survey 106 out of 130 responded and satisfaction level was 81.2%.

Some of the improvements made based on the feedback received from vendors are listed (Fig. 4.3). JIPs, with suppliers and customers are also taken up to add value to the customer/ supplier chain (Fig. 1.12, Fig 1.13) based on regular interactions with customers and vendors during business visits and non-agenda visits (Cr. 1c, Cr. 5e). Most of the new developments in traction machines are a result of joint developments with Indian Railways, a major customer.



At Unit Level At Corporate Level

Production Review Meetings.

Product Managers meetings with Head Commercial Coordination.

ED’s Cash Review meeting.

Board of Directors meetings.

MCM

capital budget meetings.

Finance Heads Meeting

Fig. 4.4b: Forums of Review

Cash Collection by Units

Centralized Cash Credit System

(Corporate Pooling of Funds)

Projection of Funds

Requirements by Units

Investment

Management

Discounted Cash Flow based IRR

analysis

.Sensitivity analysis.

Payback period analysis.

Post Appraisal analysis.

Corporate MoU with Govt. Unit

MoU with Corporate /BSC.

Target setting at product

/individual levels, review and

control

Judicious allocation to Units Investment

Strategies for surplus funds

Working Capital Management

Special thrust to liquidate old &

withheld outstanding

Payment through LC against

dispatch

Reduction in slow-moving & non-

moving inventory by exploring

alternative uses.

Cost Management Mechanism

Budgetary Control.

Product / Project wise monitoring of

revenues.

Monitoring of Expenditure

Standard Accounting Manuals

Fig. 4.4a: Financial Resource Management

4b. Finances are managed:

Financial management practices of BHEL, Bhopal supports growth, profitability, cost competitiveness, generation of cash surplus, capacity and capability enhancement. These are aligned with Policies and Strategies of the company (Fig. 4.4a).

Finances are mobilised and provided from internal resources for JVs, M&A, capacity enhancement, modernisation, capability building initiatives, employee benefits, CSR etc.

The financial data is available online through access control mechanism for operations management. Few examples are given below:

Sales related information; gross billing, net billing, turnover, collectible debtors, deferred debts, cash collection on daily and cumulative basis.

Supplier related information; LC status, status of bills, stock movement statements, S.I.T. and Material with Fabricators, bank guarantees issued by suppliers etc.

Statutory Information; latest amendments under various tax laws like central excise, sales tax, VAT, Income tax and other statutes.

Employee Centric: Pay slip, PF, Income Tax, TA/LTC, Loans etc.

Revenue budget is prepared product wise/ function wise at unit level (Cr. 2c) and subsequently approved by the Board of Directors. This includes Turnover, Material consumption, Inventories, Gross Billing, Net Billing, Operating cost and margins, EVA, profitability, cash flows, working capital etc. The expenses vis-à-vis approved budget is monitored on-line for course corrective actions. Cash budget which takes into account the cash inflow and out flow, is prepared and monitored both at unit and corporate level on daily basis. BHEL is a debt free company (including foreign currency loans) and is gearing for opportunities to leverage its financial potential in new areas/ projects. (Cr 4a) Purchase proposals and Orders: Finance reviews the purchase proposals based on trade off between imports and indigenous, lease or buy (for capital items) and comparison with sale price.

A comprehensive financial analysis for capital proposals using NPV, IRR techniques is done as per the norms laid out in the capital budget manual. Operating Results, Cash flow and Inventory reports are generated monthly and Turnover, Inventory, Billing and Cash Collection data are available on line.



2002: Mechanized cleaning 2003: Renovation of public utilities 2004: Weather-coat of all blocks/ annexes 2005: Centre of excellence 2006: Renovation of Offices/ Annexes, TBG, Pavements & roads 2007: Modernization of SCR Annexe

The financial strategies and performance are reviewed both at unit level and corporate level (Fig. 4.4b). Net income data is published in accordance with both Indian GAAP and US GAAP. As a result of reviews and innovative techniques, following major benefits have accrued:

Negotiating special insurance policies for specific needs

L.C. opening commission reduced through negotiations with banks.

Online Corporate Cash and Budget Management System.

Accounting Standards AS 7 institutionalised.

Web based debtors and forex management system institutionalised.

On line monitoring of BGs

Annual capital budget is prepared by P&D group based on long-term planning at unit and at corporate level (Cr. 2c). This is put up in the form of schemes/ feasibility reports, prepared by Industrial Engineering department as per capital budget manual. Capital expenditure of plant and equipment has grown continuously (Fig. 9.40) in line with the CSF of capacity enhancement.

Investments in capability enhancement by training through deputation to seminars and conferences, training by an outside faculty at the unit or at collaborator‟s works are evaluated qualitatively by the HRDC. Investments in socio-welfare projects like Anandam, tree plantations, parks, gardens for society, adoption of villages are evaluated qualitatively. Intangible investments, are approved by the head of finance and Head of Unit based on the qualitative and quantitative benefits proposed by the initiating department e.g. Partnership approaches for LEAN, DTC, Six Sigma etc. are approved by Head of Unit and funds provided for such initiatives.

BHEL resources funds for temporary working capital only, for which cash credit facility has been worked out with banks at interest rate equal to or better than prime lending rate (PLR), which exhibits financial creditworthiness. During cash surplus period, inter corporate deposits are resorted to, thereby earning interest and vice versa. (Fig 9.25a) The exports and imports involve cross currencies like Euro, Pound, Dollar, Yen etc. as such, there is a risk of foreign exchange fluctuation. For this purpose, exposures are identified for exports and imports. Forecast and trends in foreign exchange rates are obtained from various banks on daily basis for this purpose and currency in which imports and exports shall be affected is selected. Foreign exchange risk is managed through a centralised web enabled system. In order to protect margins due to fluctuations in forex and base material prices, a three tier pricing mechanism for product pricing is resorted to manage risks and also PVC is part of commercial contracts.

Customer out-standings are reviewed weekly to get the bills verified timely so as to liquidate sundry debtors (Fig. 9.27a, b) by tapping the various sources of funding, viz. bills discounting, Power Finance Corporation and arrangement of Packing Credit to ensure smooth cash inflow. This has enabled highest ever Cash Collection during the year (Fig. 9.26) and generation of cash surplus (Fig. 9.25) resulting into reduction in creditors. (Fig 9.28) As a result of prudent cash management (Fig 4.4a) the interest outflow to the corporate pool has continuously reduced over the years (Fig. 9.25a).

4c. Buildings, equipment and materials are managed:

BHEL, Bhopal plant established in 1956 has continuously added upon its infrastructure and now has 12 manufacturing blocks with office annexes attached to each block, various specialised test labs and facilities, canteen, HRDC, administrative blocks etc. In line with expansion plans Golden Jubilee (Hydro) block was setup in 2007 and Transformer new block is under advanced stage of completion. Primavera and DWM are effectively used for Project Management of these blocks. Complete information on plant layout is available on Intranet. The block layout also indicates location of critical machines with their technical details. The building and offices are under renovation in a phased manner (Fig. 4.5). As a pilot, a modern office named „Centre for Excellence‟ was created in 2005 and since then renovation has been extended to other annexes.

Materials, consumables and bought out items are procured through an established Materials Management process and finances are planned during budget exercise (Cr. 4b). Continuous

Fig 4.5 Building Modernisaton



Fig. 4.6: Unit and Product level maintenance

Unit level maintenance: Works Engineering & Central Services (WE & CS) is responsible for CNC and Electronics maintenance of machine tools and equipment, Test plant maintenance, Reconditioning, Centralised maintenance of cranes, pipelines for utility services , Erection and commissioning of M/c tools & equipments, Operation & maintenance of electrical power distribution system in the plant and Factory civil services like construction and maintenance of civil infrastructure. Product level maintenance: Periodical maintenance of all plant and machinery, Requirements of reconditioning and retrofitting are envisaged by product groups and executed by WEX (Fig 4.7) .

emphasis is laid on cost reduction through reduction in material consumption (Fig. 9.29), bulk purchase, rate contracts, engineering developments, reduction in physical contents through DTC etc. Equipment and building resources are planned well in advance through Capital budget Process (Cr. 2c). Structured systems viz. Purchase/ works Policy, Materials Management Instructions, Capital Budget Manual, and Delegation of Powers etc. are available for these processes. Bulk purchasing is resorted to where there is requirement from multi divisions. The requirement of such materials for the unit and corporation is pooled and assigned to a lead unit to achieve economies of scale. BHEL Bhopal is lead agency for procurement of CRGO and Copper for corporation.

Since Copper and CRGO are the major (50% of total purchases) and most critical inputs, specific strategies are adopted to ensure availability of CRGO and competitive prices of copper. BHEL has rate contracts with Metal One, Japan for supply of high grade CRGO steel. A constant vigil is kept on demand and supply situation of critical materials and new vendors are developed e.g. M/s. POSCO Korea was developed and approved by major customers, NTPC & PGCIL, for supply of MOH grade CRGO to overcome the worldwide crisis of ZDKH CRGO. This alternative grade of easily available material was introduced as a result of DTC exercise which enabled cost competitiveness and securing orders of 6200 MVA transformers worth Rs 120 crores. Similarly M/s. Salzgitter, Germany and M/s. Reiner Brach, Germany have been developed for supply of Steel plates when M/s. Mobar, the leading supplier of Steel plates was closing its operations. Copper prices depend on LME prices (Fig. 9.31). In order to safeguard the operations from volatility of rates in the market and to protect itself from the risk of buying at the peak rates, the purchases are generally made through pricing, averaged over the fortnight. BHEL has rate contract with M/S Sterlite and Hindalco and the philosophy of Vendor Managed Inventory is practiced with no stocking at BHEL. The CC Rods are directly dispatched to fabricators by the vendors the day order is placed, thereby minimizing overall inventory levels and reducing inventory carrying cost. BHEL also enters into joint development with suppliers for material which can be indigenized. For example BHEL developed Jindal Steel as a source of SS415 grade of stainless steel there by leading to zero imports against 100% imports earlier. (Fig 9.43c)

In line with the CSF of cost reduction the purchase processes have been reviewed and process of reverse e-auction is being effectively used. This has enabled savings of Rs 44.46 crores in 2007-08 in purchases worth RS.182.92 crores. A material coding system at BHEL, Bhopal helps in easier identification, faster information processing and avoids duplication of efforts. A Plant Standardization Committee headed by GM (P&D) reviews the status of addition and deletion of new codes for inventory control. The material indenting process involves automatic clearance of indents after confirmation of non availability of material elsewhere through the computerized system. This system facilitates disposal of non-moving materials (Fig. 9.33). An integrated inventory Dashboard facilitates online review and monitoring of inventory by ED, PMs and MPIC. This has led to improvement in inventory levels (Fig. 9.8c) and the targeted level of 89 days for 2011-12 as per SP 2007-12 has already been achieved. Maintenance function is managed at two levels, viz. unit level and product level (Fig. 4.6). Various steps have been taken to improve the utilisation of machine tools and plants (Fig 4.8). The list of critical machine tools is reviewed annually at Apex level and updated based on the projected workload for the year. The system has been further matured by introducing the concept of OEE against the practice of monitoring only machine tool utilisation. Monitoring of machines under OEE is one of the objectives of BSC and the numbers of machines under OEE have increased from 8 to 45 in last four years and OEE has increased over the years (Fig. 9.42). Further, to meet the stretched



Activity / Year 03-04 04-05 05-06 06-07 07-08

Reconditioning of machine tools 33 35 37 37 37

Reconditioning & CNC retrofitting 14 9 9 9 9

Electronic upgradation 21 24 25 26 28

Upgradation of electrical installation 3 8 5 5 5

Renovation of plants 8 12 12 14 15

Reconditioning of cranes 16 12 13 15 15

Fig. 4.7: Reconditioning and modernisation activities in nos.

Fig. 4.9: Waste Reduction & Recycling of waste

Practices followed for waste reduction

Optimum layout of item cut from plates/ sheets

Design Improvements- e.g. Design of Box type spider instead of conventional star Type-led to Material Reduction by 27 %, Machining Less stator frame, variety reduction of hardware etc.

Reprocessing of used transformer oil Recycling of waste generated

Copper waste used for drawing cooling tubes

Metallic waste is re-melted and reused

Galvanised sheets received as packing is re cycled. (38 MT in 07-08)

Wooden packing of purchased items is reused for packing of products. (20% of wood requirement every year)

Larger size cut-offs of CRGO are converted to cross flux & cheese core lamination used in transformers and reactors.

Large size cut offs are used for smaller components in Fabrication

Re-use of old press tool components for new tools.

Fig. 4.8: Improving Utilisation of machine tools and plants

Reconditioning and retrofitting of ageing facilities (Fig.4.7).

Monitoring of utilisation of high value machine tools as per well established and documented system (Fig. 9.42).

Steam turbine machine and assembly shop where machines were idling because of lack of orders were utilised for machining of hydro orders in year 2001-2004 and IMM orders in 2005-06.

Sharing Of Major Machine Tools for Optimum Utilisation and Labour Works Contracts.

Online Maintenance Management system for Breakdown Analysis and spare management of machine tools.

VPI plant of traction motor division was utilised for impregnation of Wind electric generators in 2007-08

Development of unmanned chip disposal system for improving machine availability

target of shop turnover a strategic decision has been taken to maximize the utilization of CNC and Critical machines. Subsequently 18 CNC and 30 critical machines including plants and ovens have been identified for 24x7 operations. All factory and block gates and critical locations are manned by CISF personnel

to ensure security of assets. Material from the stores is issued against authorised material requisitions. All assets of the factory are insured. Subsequent to the review of the security system, issue of gate passes with on spot image processing of visitors was introduced in 2006. For sensitive areas such as informatics centre, smart card door access has been installed and Iris detection system is installed for server room.

There is a full fledged fire service unit of CISF to meet any emergency. Potential risks in areas like Gas & Power plant, LPG storage plants etc are covered through mock drills. A state of art warning system has been installed in all sensitive locations in the factory for early warning and detection of hazardous situations. Dry type transformers have been installed in substations to prevent incidents of fire. Due consideration is given to prevent any adverse impact on the neighbourhood community and the employees due to operation of plant and machinery by the safety department through routine checks, audits and ensuring compliance to statutory and regulatory requirements. e.g.

On-site/ Off site management plans are in place to take care of LPG hazards

Effluents are treated and the resulting raw water and manure is used in the horticulture.

Fire drills are carried out to train the employees and check for preparedness. (Cr. 3e)

Auto water sprinkling system, closed circuit television and alarm system for LPG.

Occupational Health Services (OHS) group plans and organises pathological, biochemical, biological and environment monitoring of emission levels in the working areas. (Fig 8.7b) People working in hazardous areas are subjected to periodical medical examination. Those working in areas having X- ray exposure are given radiation exposure badges issued by BARC and pocket dosimeter which measures the extent of exposure. Consumption of utilities like Power, LPG, Coal, Steam, Compressed Air and Furnace Oil are regularly monitored. A plant level Energy Management Cell is responsible for Identification of projects for reducing utility consumption, identification, monitoring and implementation of energy conservation plans and education of people. An energy policy is the guiding light in these efforts. These efforts have resulted in reduction of Energy consumption (Fig 9.37a). With an objective to be an “Energy Efficient Unit, BHEL Bhopal has partnered with CII. An extensive energy audit was conducted jointly in 2005-06 with CII experts and energy saving projects taken up and completed.



Imminent market needs Examples Collaborations Siemens for Motors Joint venture(JV) Hitachi, Fuji, Toshiba for Hydro products Transfer of Technology (ToT) EMD-USA, Traxis-Holland for traction Joint Bidding Siemens for Transformer, Toshiba for

locomotive electrics Future technological needs Examples In house R&D – PIR 765 kV, 500MVA Transformer, 1200 KV CVT Collaborative projects Simulation studies of IGBT based drives Engineering order Prof. Dennis Allan from UK for consultancy Fig. 4.10: Technology management options

Reduction in generation of waste is taken up at the stage of design of the product and while deciding the technology for manufacturing. Recycling of waste is done continuously (Fig. 4.9). Continuous efforts for reduction in consumption of the non-renewable resources are made or alternate material/ products are used to eliminate their consumption altogether. For Example:

Reduction in consumption of water by modifying the cooling water system of boilers.

Reduction in engine oil consumption by developing oil filtration system for reusing waste oil.

Reduction In consumption of furnace oil through recovery from oil sludge

Reduction in wastage of lubrication oil through return of used oil for recycling.

4d. Technology is managed:

In line with organisations vision a sustained focus is given on engineering excellence. Technology gap being a CSF is managed through a structured approach of identification of gaps and bridging plans. Plant Engineering Committee (PEC) chaired by Director (E, R&D) and convened by GM(P&D) with all product managers and engineering heads as members is the apex body that steers development of long term engineering excellence plans. A five year engineering road map with year wise milestones is prepared by respective product managers and approved by ED. The five year plan is cascaded to year wise strategy maps and BSC. Specific plan based on the analysis of business environment, past performance and market forecasts product specific strategies are formulated at the corporate level and cascaded to unit level product plans (Cr. 2c). These inputs along with market trends are considered by PC and TC to decide on action plans culminating into approval of PIRs. A calendar of PC/ TC is prepared by CEPD in consultation with engineering and is finally approved by Director (ER&D). TC/PC steers the product development activities thus ensuring technological edge.

Technical committee: Chaired by head of product engineering and having members from product marketing, corporate R&D, CEPD, P&D and invited members meet as per approved calendar. The TC deliberates on various issues related to technology to meet imminent and future technological needs. Depending on customer specifications and future market needs specific strategic decisions whether to go for collaborations/ JV/ ToT or in-house development through PIRs are taken up (Fig. 4.10). Product committee: Chaired by product GM and having members from engineering, commercial, manufacturing, quality, materials management, Corporate R&D, CEPD, P&D, Corporate marketing groups and Convenor of TC also meet as per approved calendar. The product committees analyse the product

benchmarks (not in public domain, hence not presented), market share (Fig 9.10-9.12), market scenario,

existing, alternate and emerging product, manufacturing and testing technologies keeping in view the strategic plan. Based on the analysis and customer relationships pricing and tender specific strategies are formulated to ensure customer retention. (Fig 6.15)

The technologies of collaborators have been assimilated to enhance in depth understanding of world class products. Technology is also being improved in association with Corp R&D, Research and technical institutes and learning through customer‟s feedbacks. BHEL, Bhopal lays emphasis on in-house R&D efforts through PIRs and/ or collaborative projects (Cr. 4a). For management of such projects a well defined system as per EMI 3656 is followed which guides on the process of project initiation, project status and project completion. The focus on in house R&D to meet the future technological needs has resulted in increased R&D expenditure during last few years and is targeted to further increase in coming years (Fig. 9.43a). As a result there is an increase in commercialisation of R&D projects (Fig. 9.43b) and turn over from new products (Fig 9.5).

In order to fulfil ever growing customer expectation, efficiency and performance improvement of all major products through in house R&D is planned and implemented by developing innovative technologies. The objective of such developments is to add value to the existing product profile and



Project category 03-04 04-05 05-06 06-07 07-08

Low cost automation 5 5 4 6 4

Rretrofitting CNC / DRO, EPM 3 2 3 3 2

Special purpose machines 7 7 7 7 10

Fig. 4.11: Manufacturing Technology Projects

Fig 4.12: Network resources at BHEL Bhopal

Total Nodes 1339, Fiber Optic GB backbone

Factory wide internal Block Network with a mix of Fiber Optic ( >20 Kms.), UTP media (>70 Kms.).

Cisco Router, Backbone Switches

Switched network with structured cabling.

WAN Leased circuits for dedicated 2x2mbps connectivity for Internet / Email / VPN facility

Heterogynous Network Operating systems Unix HP, IBM-AIX, LINUX, WIN 2000/NT etc.

TCP/IP NetBEUI Environment.

conserve energy and resources. Such technology development programs are identified in product plans and strategy maps and are cascaded through BSC objectives. For example in case of hydro turbines and generators, which is the most environmental friendly power generation system, there is a continual emphasis in improving equipment efficiency thereby generating more power and revenues for the customer.

The need and status of manufacturing technology, processes and shop and testing facilities are deliberated in product committee meetings. Modernisation and upgradation of manufacturing facilities is carried out through modernisation schemes and capital investments (Fig. 9.40). In order to have a competitive edge, state of art testing facilities have been set up which includes:

Centre for Electric Transportation, the only facility in India, where all types of rail transportation vehicles and combined system of locomotive are tested under simulated load conditions.

Ultra High Voltage Laboratory- one of the seven prestigious laboratories in the world and only one in country for testing highest rating power transformers

Hydro Lab- one of the few labs in the world where scaled models of hydro turbine are tested and proved prior to full scale manufacturing.

Advance Technology Group is responsible for upgradation and improvements in manufacturing technology through development projects that are identified annually at the unit level, as per WMI 1109, in consultation with concerned manufacturing, engineering and technology groups. Every year around 15 projects are completed entailing an expenditure of around 1.2 Cr (Fig 4.11). Some of the major MTD projects implemented during last few years are:

Introduction of PLC based control system and cross feed arrangement on the plano-miller.

Introduction of self powered mobile beds for CNC Plasma arc cutting machine.

Development of dedicated system for manufacturing of copper wire bars.

Development of special purpose machine for ironing of insulation of stator coils.

Development of battery powered mechanised trolley for LEM jobs.

BHEL Bhopal improves its business processes, manufacturing processes, engineering and maintenance processes using Information and Communication Technology (ICT). There are centralised Informatics and Communication groups, which are equipped with latest technology. ICT needs are regularly evaluated and appropriate technologies are identified during the Functional heads meet at the corporate level. The present network resources at BHEL Bhopal are given (Fig. 4.12). All major processes like HR, Finance, Purchase and Maintenance are IT enabled. A documented MI, is in place for users to request for IT enablement of processes. In addition to this, DNC network of CNC machines enables remote programming. SCADA system for power distribution for town

ship and remote control of cranes are some other examples of application of IT in improving operations. 260 nos. of Engineering PCs (with 4 GB RAM, 19” Flat Screen and High-end Graphics Card) and 12 Nos. of Xeon Workstations (16GB RAM, 19” Flat Screen) have been provided to Engineering divisions in 2006. This has facilitated in significant increase, (75-100%) in drawing generation through Autocad (Fig. 9.49b). A Common Bill of Material (BOM) system has been developed to facilitate Automation of Engineering Information Flow. A company wide Knowledge based Engineering System has also been formulated for holistic design automation. Design automation has been taken up in all engineering groups for flexibility, reduction in cycle time, automatic BOM generation and 3D modelling. The partners for design automation have been finalised through a structured process of selection on well defined parameters. Specific engineering software for simulation studies, modelling, design, layouts etc. are used resulting in continuous



Stakeholder Information Media

Customer (Controlled access)

Product New products Operation & maintenance Manufacturing status QAP, Drawings for approval

Internet BHEL Journal, News letter Service bulletins Internet & Hard copy Internet & Hard copy

Employees (Controlled access)

Operations related data: Strategic plans, BSC Results, Handing over, T/O, cash etc Product related: Drawings, product standards, national international standards, Management Instructions Employee centric: Salary, leave, PF, bio data, directory, e MAP, property return, Income tax, circulars Survey results: People, Customer, Society Knowledge: Product standards, Drawings, Specifications

Intranet BSC Boards, CRISP Intranet & Hardcopies Intranet Intranet Intranet

Suppliers (Controlled access)

Tenders, Enquiries, PO status, Bill status, Payment status, VPR Drawings, Specifications

B2B, Internet Hard copies

Shareholder (Free access)

Company information Annual reports, News Business results

BHEL website, Internet Hard copies, Press release, bulletins

Society (Free access)

Cultural events, welfare schemes, sports activities, educational facilities, vocational courses

Newspapers, Newsletter, Public announcements, hoardings

Fig. 4.13: Information needs

improvement in engineering cycle time (Fig 9.17) and its quality. For requirement of such engineering software an Engineering Software Committee regularly vets the requirement, reviews its utilisation and maintains an inventory of software in plant. Apart from standard engineering software, product specific engineering software is developed and continuously improved by designers. eg. Subsequent to DTC exercise, the existing transformer design software has been upgraded and Linear Programming tool for economic slitting of CRGO is being used. For better management centralised license server has been installed at IFX for on-line loading of engineering software e.g. Autocad, Ideas, SUG-NX3D.

4e. Information and knowledge are managed:

The need for managing information and knowledge emerges from the CSFs and focus areas of the organization. The Information needs for each stakeholder are systematically categorized and organized (Fig 4.13) for providing access to them. Company wide IT network is effectively utilized for collecting, structuring and managing information and knowledge. Most of the data is available in soft form and data requiring wider dissemination is available on intranet. The data of common interest on intranet is in public domain and is freely accessible to everyone. Other sensitive data is controlled through passwords. e.g. Real time data on handing over, cash collection, dispatches, inventory etc is accessible to HODs and GMs through password for DWM. Visual Dashboards enable on line monitoring of operational parameters. The unit is accredited with ISO/IEC 27001:2005 (upgradation from BS7799-2) for ISMS certification. The validity, integrity and security of information is ensured through structured documentation. Various documents are reviewed and approved by the departmental heads prior to issue. Data verification, check-listing, reconciliation, built program validation for attributes such as value, range, limits, check digits etc. are operated rigorously to ensure reliability of data on electronic media. Procedure is in place for taking cold backups, users backup, incremental backup for all servers. Application software is secured through authorisation codes. Secured network access is ensured through a combination of hardware and network access security software. E-mails are analysed for any sensitive information exchange. Communication and IT resources have grown over the years (Fig. 9.47, Fig. 9.48) and have resulted in reduction in processing time. BHEL, Bhopal has a website and an intranet site which has portals of all departments for knowledge management and information exchange. Functional systems like Finance, Personnel, and Material Management are run on centralized main frame computer or servers. A LAN connecting all blocks of the factory and also hospital with transmission rate of 1 Gbps is laid and external connectivity is ensured through 2x2 Mbps leased lines. This enables development of integrated systems and seamless flow of information.

The need of state of art communication network is identified in Functional Heads meet and as a sequel to same communication network has been upgraded in 2007 having a capacity of 3000 lines.



Fig. 4.14: Knowledge preservation

Product standards, drawings and specifications, Collaborator documents

BHEL Journal

Product specific compilations

Product specific KM portals

Monthly Engineering Highlights

Fig 4.15: Improvements through IT

Engineering server/ business server consolidation

In-house ERP ‘Nirantar’

Corporate Cash Management System

Traffic logistics system

E-MAP

Customer Complaint system

Monitoring of loading advise

WEB based MIR reporting for

Wireless LAN connectivity

175 persons trained in UGNX

On line inventory status

Use of UG in Turniing/ milling

On line BG monitoring

2002-2003 2003-2005 2005-2007 2007-2008

Forward and reverse auctions

Works Contract for effective utilisation

Onsite Fabrication for reduction in dispatch costs

Creative work done and Engineering achievements compiled in form of booklets-‘Anunaad’ & ‘Ninaad’ respectively

Building maintenance and face lifting of public utilities

Comprehensive supplier related information on intranet

OEE initiatives

Assessment of CMMI preparedness

Compilation of ‘Engineering highlights’ and ‘Spandan’.

Collaborative Projects for technology upgradation.

Renovation of annexes

ISMS -ISO/IEC 27001:2005 certification

OEE concept extended to 30 machines

Outsourcing of non core adding processes

Introduction of special awards scheme for patents/copyrights.

Holistic design automation.

E-buying introduced

Capacity augmentation schemes such as golden jubilee block for hydro and new block for transformer

B2B portal

Fig. 4.16: Improvements as a result of regular assessment and reviews

The communication network provides services like Video Conferencing, Unified messaging system, Computer Telephony Integration (CTI), IP Telephony and Wireless system Integration and CUG mobile telephony amongst all executives in the grade of Senior Engineers and above (more than 1000 nos.).

To protect the IPR patenting is encouraged through a structured system for filing of patents. A revised incentive scheme with provision for substantial cash awards for submission, filling, grant and opposition of patents and copyrights has been introduced with a focus on protection of IPRs and motivation/ recognition of individuals and teams. (Cr. 1d) IPR cell at unit level and Corporate R&D facilitates patent search and alerts on regular basis. There has been a continuous increase in patents filed over the years (Fig 9.45). The knowledge in BHEL Bhopal is preserved and enhanced in various ways as illustrated (Fig. 4.14). Product related knowledge is captured as product standards, drawings and purchase specifications. These are accessible to employees for day to day operations, product & process improvements and development of new products. “BHEL Journal‟‟ and “Engineering newsletter” captures all technical papers and in house developments and is available through VPN. Incentives are in place for contribution in BHEL Journal. Engineering developments are captured and disseminated through Engineering Highlights on monthly and annual basis.

A well maintained central library and internet facilities to all executives both at office and home are provided to facilitate knowledge acquisition. Creative work done and achievements are compiled in the form of booklets and also put on intranet e.g. booklets on six sigma projects, quality circle projects, engineering developments, technological development projects etc. Business parameters are compiled at Unit Level for last ten years as „Facts at a Glance‟ and at Corporate Level as „TEN YEARS DIGEST‟ to facilitate comparisons and benchmarking.

Major achievements through information technology in last five years are given (Fig. 4.15).

Approaches of partnerships and resources have been refined over the years (Fig. 4.16).




Processes

BHEL BHOPAL Application Document – CII EXIM Bank Award For Business Excellence 2008 Page 5 - 1

No. Process Inputs and specific resources Output Key Performance Indicators

1 Tender processing

Tender / Enquiry and statutory & regulatory requirements

Technical Offer and Price

Percentage of Order Booked Vs Offers Submitted

2 Order Processing

Customer order and technical offer

Work order Time for release of Work Order from receipt of customer/internal Order

3 Design and Development

Work order, customer spec., statutory and regulatory requirements

Drawings, GES, MID, Test schedules, Product Standards, Shipping list, Material forecast and Purchase indents

-Time for submission of technical offer -Engineering Cycle Time (Fig. 9.17) -Number of design changes -Number of new design / features developed

-Cost reduction

4 Material Procurement

PIs, PMD and Purchase policy Material receipt at stores - PI to PO conversion time (Fig. 9.16) -- Vendor Performance rating

5 Manufacturing Work order, design data, material and tooling

Product -Physical Turnover / Target (Fig. 9.13) -Profit before Tax (Fig. 9.3) -Value added per employee (Fig. 9.22) -Inventory as No. of days of Turnover (Fig. 9.8c) -Non moving inventory (Fig. 9.33) -Cycle time (Fig. 9.15) -Cost of rework / rejection (Fig. 9.18,Fig. 9.19) -Delivery performance (Fig. 6.5)

6 Inspection and Testing

Work order, Design data, Quality Plan, Inspection &Test Procedures/Standards/Instruments, Equipments and Materials

Conforming Product Non-conformities -Cost of Rework & Rejection(Fig. 9.18,Fig. 9.19) -% SRVs cleared within 5 days (Fig. 9.16)

7 Packing and Dispatch

Product, PFR, Shipping List, Packing material, Transport, Packing & Dispatch Instructions

Product receipt at customers’ site

-Time taken from Handing over to Receipt at site - Transit Damage

9 Services Service request Satisfactory Resolution -Response Time & Resolution Time (Fig. 6.11)

Fig. 5.1a: KPIs, Inputs and Outputs of Business Processes

5. PROCESSES

5a. Processes are systematically designed and managed:

Business processes are designed to fulfil QCD requirements of the customer. These business processes (Fig 5.1a) are supported by support processes such as HR and Finance related processes. In line with the strategic plan and CSFs some of the business process and support processes are defined as key processes (Fig 2.9). The business processes and their KPIs are identified in the apex level manual i.e. Quality Manual. Similarly, the support processes are documented in the respective manuals such as HR Manual. A structured system of Management Instructions (MIs) and Departmental Working Instructions (DWIs) ensure effective deployment of processes at all levels. The processes are developed and reviewed by 13 standing functional taskforces. The taskforces are empowered to incorporate process improvements as and when need arises or suggestions for improvements are received.

Key performance Indicators (KPIs) and inputs and outputs of all processes (Fig. 5.1a) are identified by functional taskforces. KPIs of all functions are reviewed and revised every year and are specified in respective MIs. KPI targets are set as part of BSC objectives of product managers/ functional managers/ HOD, as the process owners. e.g. Head Commercial (EM) is the process owner of tendering and ordering process of Electrical Machines.

The adoption of specific system standard(s) for BHEL, Bhopal is finalized by top management and responsibility assigned. BHEL Bhopal is certified for following system standards:

ISO 9001 system standard since January ‟94 upgraded to ISO9001:2000 in 2002. ISO/IEC:2005 for ISMS NABL accreditation as per ISO:17025 for all Calibration and Testing Laboratories ISO 14001 system standard for environmental management since 2001. OHSAS 18001 system standard since July 2002. ASME U Stamp for pressure vessels

Processes


Process improvement strategies

Improvement quantum

Deployment

Balance Score Card Breakthrough All products and functions since 03-04

Six Sigma Breakthrough/ Incremental

All processes/ all functions since 05-06

DTC (Design to Cost)

Breakthrough Pilot in Transformer in 05-06, extended to EM in 05-06 & TPTN in 06-07, Thermal in 2007-08

Design automation Breakthrough Pilot in SCR in 04-05, Hydro & CDE 06-07 and extended to all products now

BPR and ERP Breakthrough Piloted in SCR in 03-04

e-MAP Breakthrough All executives since 02 -03

LEAN Breakthrough Pilot in SCR and TPTN in 07-08, being extended to EM and Hydro in 08-09

IMPRESS Incremental All employees since 04-05

DWM Incremental All products since 05-06, extended to functions in 07-08

5 S Incremental All product and functions since 01-02

Suggestion scheme Incremental All employees since last 20 years

Quality Circle Incremental All employees since last 20 years

Fig. 5.2: Process Improvement Strategies

The systems (MIs) have in-built mechanism for resolution of interface issues. The interface issues beyond the scope of MIs get resolved in various forums (Fig. 1.16).

System for resolution of Internal Interface Issues: Process ownership is imbibed through BSC at GM level, HOD and HOS levels and e-MAP at individual level. The process owners manage the process to satisfy related process stakeholders and resolve the interface issues. The system for resolution of internal issues is as below:

Sister unit and issues related to corporate functions are resolved in project review and contract review meetings, issues needing escalation are taken up in pre MCM and MCM. The agenda of such issues is hosted in advance on MCM webpage and the concerned unit/ function head presents the status and the action plan.

The thirteen task forces at unit level review MIs and resolve function specific issues. For cross functional issues cross functional teams are constituted by top management as per the

needs (Fig 1.5) Employee related issues: These are discussed and resolved in three tier bipartite forums and

advisory committees. Corporate Level CFTs with representation from Bhopal unit are also constituted for resolution of corporate level issues e.g. 24 function specific KRA taskforces.

System of managing external interfaces is as per (Fig. 5.1b). System for resolution of external Interface Issues: 5b. Processes are improved, as needed, using innovation in order to fully satisfy and

generate increasing value for customer and other stakeholders:

CSFs, KPI trends, stakeholder‟s feedback, learning from assessment and audits etc drive the incremental or breakthrough improvements. The system for identification and implementation of improvement activities has been improvised and integrated with e-MAP. It is mandatory for various level of executives to select capability building KRAs i.e. KRAc which are improvement oriented KRAs. Higher the level of executive, higher is the percentage of KRAc assigned. HR processes are reviewed for improvement by three tier bipartite forums. The need of process improvements and learning from different units are also shared and finalized in Functional Heads Meet viz. Planning, TQ, Engineering, IT, HR, Finance etc.

Managing External Interface Issues

Stakeholders Issues Review & resolution forum

Customers Customer feedback, complaints Contract reviews, customer meets, Non agenda visits, training programs and regular interactions.

Suppliers & partners

Techno-commercial issues Tendering, finalization of offer, placement of order, receipt of supply etc. (Specific issues are taken up in vendor meets and/or meetings of supplier representatives with head finance and head MM (Cr. 4a) e.g. 98.3% payment through Electronic Fund Transfer

Society Statutory requirements, Society requirements eg Health, Society, Environment

Discussions by Publicity and Public Relations department, Town Administration department etc with various Government Departments in connection with fulfilment of statutory requirements.

Fig. 5.1b: External interface issues

Processes


Fig. 5.5: DMAIC approach for Six Sigma

DTC

Design to cost, DTC, rigorously identifies and captures step change cost improvements through cross functional application of data driven tools to achieve cost transparency. Achieved through Product content review and functional benchmarking Design optimization of technical solution for chosen functionality

Product specific purchasing optimization

Fig. 5.4: DTC Process and Tools

The inputs from above are used to initiate process improvements viz. QIPs, PIPs, JIPs, TDP etc. which are now under the umbrella of IMPRESS.

Keeping in view the various strategic requirements, Specific Process improvement strategies are formulated (Fig. 5.2). Breakthrough process improvements requiring deployment in many product and functional areas are planned and prioritized at the top management level. For cost reduction, DTC is one of the key processes that enable breakthrough changes in existing designs, materials and processes. Breakthrough improvements through DTC are being deployed, reviewed and monitored at unit level through unit steering committee. The DTC process is illustrated in Fig. 5.3. The tools used to enhance breadth and depth of ideas generated during formal interaction with vendors, customers, consultants, experts in the process of DTC exercise is illustrated in Fig. 5.4. First transformer of 315 MVA rating, developed with DTC recommendations has rolled out for POWERGRID, a major customer. The savings accrued as result of DTC exercise in transformers, traction machines and electrical machines are given in Fig. 9.32a.

Six sigma approach for cost reduction, cycle time reduction and quality improvement, is being implemented by adopting a handholding approach with Indian Statistical Institute both for breakthrough and incremental process improvements in all product and function areas. BHEL Bhopal

follows DMAIC approach for Six Sigma projects (Fig. 5.5) and this year DFSS projects have also been piloted. So far, more than 130 six sigma projects have been completed and pools of 100 Black Belts and 80 Green Belts have been developed as a resource. The savings accrued as a result of six

sigma implementation are illustrated in Fig. 9.32c.

LEAN approach (Fig. 5.6) has been adopted in SCR and Traction Division in 2007-08 and various process improvement ideas have been implemented. (Fig 5.6a) This has resulted in quantum financial gains and improvement in capacity enhancement, first pass non conformance, OTIF etc. (Fig 9.32b)

Fig 5.3 DTC process

Processes


Fig. 5.6: LEAN approach Fig. 5.6: lean approach

1

WHAT IS LEAN?

What is lean

• Make what the customer

wants

• Make only the required

quantity

• Delivery when customer

wants it

• Do only what adds value

to the work

Step

Change

Continuous

Improvement

• 30-50% higher production volume with same assets

• Reduced cycle time for on-time delivery

• Reduced cost

• Improved quality

• Possible benefits to you

–Improved safety

–Less fire fighting

–Less rework

–More clarity on what to

do

Time

3

“The way physical assets and

resources are configured and

optimised to create value and

minimize system inhibitors”

“The formal structures,

processes and systems

through which human and

organisational resources

are managed and

optimised to achieve

shared goals”

Operating system maturityManagement infrastructure

maturity

Mindsets, capabilities and behaviour maturity

THREE ASPECTS OF LEAN

“The way people think, feel and conduct themselves

in the workplace, both individually and collectively”

Operatingsystem

Management infrastructure

Mindsets& capabilities

Product Groups No. of ideas (Cumulative)

Total Target 07-08

Impl.

DTC- Trfr -315 MVA 33 23 23

DTC Trfr-200 MVA 32 23 23

DTC - Electrical M/c 46 43 46

DTC - Traction M/c 19 19 4

Lean - Switchgear 49 44 40

Lean - Traction M/c 80 64 60

Fig. 5.6a: DTC/ LEAN ideas

RCA methodology is applied in line with documented procedure (WMI-0832) for resolution of recurring shop/ site problems, RCA committees exist in all product areas for identification of the root cause and implementation of corrective & preventive actions. A unique on-line system „‟IMPRESS‟‟ (Improvement Projects Reward Scheme) is available to all employees for registration, evaluation and reward of improvement project (Cr. 3c). Suggestion Scheme and Quality Circle activities provide platforms for personnel even at lowest level to participate and contribute in improvements (Fig. 7.5b). Employees are rewarded for participation and involvement in process improvements (Cr. 3c). Some examples of breakthrough/ incremental improvement are listed in Fig. 5.7.

For effective utilization of existing manpower, Core-Non-core activities have been identified and non-core activities are being out-sourced (Cr. 3a). SAP HR has been implemented for synergising and integration of HR processes thus reaching out to employees on real time basis (Cr. 3b). The identified Process changes are presented to the appropriate apex forums for review, approval and subsequent deployment e.g. in case of DTC - unit steering committee, in case of Six Sigma - concerned PM. New or modified process is initially piloted and trial runs are undertaken. The results of piloting are reviewed and compared with set objectives by the process owner. Some examples of piloting carried out are LEAN and DTC.

Breakthrough improvements examples Design development of 765 kv, 500 MVA Auto transformer Reduction in Recruitment Cycle Time of ETs from 8 to 3 months Boltless core in transformers (DTC) Step-lap construction of cores (DTC) Use of LP in CRGO cutting (DTC) Reduction of leakage during hydro testing of BF Valves Assembly

(SS) To control Hole size in Tube plate of HP Heaters (SS) Reduction of Leakage in Radiator elements (SS) Development of optimized design of 12 kV switchgear for

distribution switchgear (SS) Reduction in commutator ovality of TM 4907 traction motor (SS) Welding mechanisation increased from 38% to 47%

Incremental Improvements examples Indigenization of SMT based gate drive card for auxiliary

converter Reduction in testing time of Insulating Kraft Paper Development of stick type master controller with snap switches for

diesel electric locomotive Reduction in rejection of Piston Insulators in shop and by

customer Energy efficient techno/ axle generator test unit Purification of 1200 ltrs waste lube oil for reusing in air

compressors Site fabrication expanded from one site to four major sites. Issue of materials such as steel plates, welding electrodes to

ancillaries through BHEL Co-operative Society for maintaining uniform quality and cost effective buying.

Fig. 5.7: Examples of Breakthrough and Incremental improvement

Processes


The process changes are communicated through amendments/ revisions in various documents and or communication in various forums (Fig. 1.16). For HR and financial matters, circulars are uploaded on intranet. Important information is included in “Sandesh” -the in-house magazine. This has reflected in perceptible change in communication process (Fig. 7.1a). Changes in processes affecting customer are communicated by service bulletins through product service cells. Changes in processes affecting vendors are communicated through vendor meets and meetings with supplier representatives.

Training needs for the process change are identified by process owner in consultation with HRDC. Such needs are translated into training programs by HRDC (Fig. 3.9, Fig. 3.10). For example:

Training on six sigma (180), DTC (24) and LEAN (18) Vendor assessor Training-More than 200 assessors trained by BVQI. All employees have been trained on QMS, EMS, OHSAS & MBE concepts. Lead assessors training on ISO 9001:2000, ISO: 17025, ISO 14001, OHSAS 18001. Training to 100% executives on eMAP.

5c. Products and services are designed and developed based on customer needs and expectations.

Engineering is one of the core strengths of BHEL, Bhopal. All the products of BHEL Bhopal are customer specific and are engineered, manufactured and delivered to meet customers‟ needs and expectations. The customer requirements are determined through customer meets, pre-tender and post tender discussions, contract review, training programmes, workshops, visits, customer satisfaction survey etc. (Fig 5.11). The requirements are then translated in form of new/ upgraded products. The design control process (Fig. 5.8) as stipulated in EMI3650 is subjected to continuous improvements through established review mechanisms. The design input includes the customer requirements and the product benchmark parameters.

Based on triggers received from various sources, new products and process improvements related to the core strengths of the organisation i.e. engineering and manufacturing are deliberated and finalized in Product/ Technical Committee meetings (Cr. 4d). For design development of new products options of joint developments with established players, development through collaborative projects with institutes and/ or PIR route is adopted. PIRs and collaborative projects with leading institutions (Cr. 4a) result in design and development of new products and/ or improvement in efficiency, performance and reliability of products. This also results in capability building of design engineers. The PIR system (Cr. 4d) for futuristic technologies is an established system and PIRs are reviewed monthly at product, unit and corporate level. The improvement and new development of products and technology are also reviewed in MCM. In order to give thrust to R&D activities, engineering reviews chaired by ED are now held monthly. As a result of sustained focus, unit spent 2% of turnover on R&D efforts in 2007-08 and has plans to spend Rs 2.3 % of turnover in 2008-09. (Fig 9.43a, 9.44) The futuristic technologies are also adopted through joint developments with suppliers and customers. eg. Looking into the need of high voltage transmission and plans of major players in the transmission sector such as POWERGRID, joint development of 765kV products has been undertaken. Similarly, use of futuristic AC technologies in transportation sector has led to joint development of IGBT technology with M/S Struckton, Netherlands. Controlled Shunt Reactor was proactively designed in association with a Russian Professor in order to meet power sector requirement of quality power transfer under varying load conditions. POWERGRID, a major customer of Transformers installed it

Fig. 5.8: Design process of new product

Design

Validation Contract

Review

Design

Input Design & Dev

Planning

Design Output

Design

Verification

Design Review

Processes


for commercial operations and the successful results have brought in more commercial orders e.g. recent order from MAHAGENCO for the same. Where the existing design and technology does not exist to fulfill the customer requirement, BHEL goes for partnership agreement (Cr 4a) with the organizations having required technology e.g.

IGBT based 3 phase drive system for 7000 HP locomotives. Control unit of Auto Recloser with M/s JVS Bangalore.

Senior executives of BHEL are proactively associated with customers e.g. ED Bhopal is a member of Diesel Locomotive Works (Indian Railways) co-ordination Committee. Coordination committee meets at DLW, Varanasi/ BHEL Bhopal every year in the month of April /May. CMD, BHEL is a permanent member in Central Board of Railway Research (CBRR), an apex body of Indian Railways which annually deliberates and prepares program for research for future needs of Indian Railways.

Some of the new products introduced as a result of above approaches are: Design of 250MW Hydro Generator World class Oil rig alternators with minimum THF – inhouse Wind Electric generator H- Compact motor - inhouse 400 MVA – highest ever rating transformer for ADANI power - inhouse Development of 80 MVAr, 765 kV, Shunt reactor. – futuristic technology - PIR Development of 500 MVA, 765 kV, Auto transformer - futuristic technology - PIR Hotel Load alternator for traction application, thereby resulting in additional revenue for Railways. TM4701 traction motor with reduced weight and universal application. Dual winding traction alternator TA6303AZ for ballast cleaning machine application

New products are also developed in association with customers and suppliers for meeting the needs and expectations of the customer in form of JIPs e.g.

Compact Alternator mounted rectifier for DE Locomotives. Alternator specifically for Wartsila Diesel Engines for D G Sets. 3MW LT alternator with M/S Triveni for sugar industry.

Some examples of new technology development are: Development of linear programming software on ILOG platform for optimized core cutting for

transformers (one of the outcome of DTC exercise). IGBT based hotel load inverter for train lighting, air conditioning, pantry and auxiliary services.

Some examples of product quality and value enhancement are: Development of cast-fabricated components for hydro turbines such as BF valve, spherical valve Reduction in variation in feather height of guide vane (Six Sigma Project). Reduction in rework level of cylinder assembly of 24 PC EP contractor of Diesel Electric

Locomotive (Six Sigma Project). Noise level reduction in Traction Alternator TA7003BX from 113 db to 101db (Six sigma project). Indoor metal clad switchgear for MSEB with environmental temperature of 50 degrees against

international norm of 40 degrees C.

Some examples of services developed based on customer requirements: Site support services to cater for round the clock service requirement of Railways in Mumbai Computer based training package on CD for common site problem for Motors and OLTC. Computer system package for transferring drawings to customer on internet. Onsite fabrication of hydro assemblies.

Customers pose confidence in BHEL because of its engineering capability in field of design and development of products to suit their needs. The increase in repeat business (Fig 6.13) and customer retention (Fig 6.15) is a resultant of customer loyalty. (Fig 6.13) The effectiveness of new developments is measured through turnover from Commercialisation of New Products (Fig 9.43b) and filing of Patents/ Copyrights (Fig 9.45) which are also tracked and monitored as BSC objectives at Unit level, Product Manager and HOD level.

Product improvement and developments are compiled as a booklet „Engineering Highlights‟ which was published annually at the unit from 2003 to 2006. Learning from this practice of BHEL Bhopal,

Processes


engineering highlights are now compiled for all units and published at corporate level since 2007. As a sequel to review in plant engineering committee meeting the Engineering highlights are now captured every month and uploaded on intranet for wider dissemination and learnings.

In order to improve the design process, Design Automation Initiative (Cr 4d) in all products has been taken up. The number of drawings generated through Autocad is increasing manifold over the years (Fig. 9.49b). PIRs worth Rs11.35Crs have been approved for holistic design automation and further PIRs worth Rs20.93Crs are under approval.

5d. Products and services are produced, delivered and serviced:

BHEL‟s operations are organized in three Business sectors viz. Power, Industry and International. The range of new and proven products and services is communicated and marketed by these sectors where as the selling of products and a service is done by respective product commercial groups at Bhopal. Details and features of products are available on Corporate and Bhopal sites i.e. www.bhel.com and www.bhelbhopal.com respectively. The improvements in products and services are communicated through media, press meets, customer meets, seminars and in-house journals. The in-house journals of Bhopal and Corporate are regularly sent to customers. Other methods of communication to new/ potential customers and existing customers include participation in the exhibition/ seminars at national levels e.g. ELECRAMA, ELORAMA etc.

Product Commercial groups at BHEL, Bhopal receive the customer orders from the respective marketing divisions and in turn issue internal work-orders to the concerned product groups. The design (Fig. 5.8) and production processes get initiated after issue of work orders. The process of production, delivery and servicing is illustrated below (Fig. 5.9).

Conversion of engineered design into products is also a core strength of the organization and the production process are designed to facilitate production of varied product mix. The production blocks at BHEL Bhopal are product specific for facilitating optimum manufacturing process. The production blocks house conventional and CNC machine tools. The conventional machines are being upgraded to NC/ CNC in a phased manner (Fig. 4.7). Augmentation and modernization of the manufacturing facilities are underway (Cr. 2c) for capacity enhancement, a CSF of BHEL, Bhopal.

Quality Assurance Plan is prepared in agreement with customer, subsequent to completion of design process and prior to beginning of actual manufacturing of product. Given the uniqueness and complexity of products the customer is involved at all stages of manufacturing through Customer Hold Points (CHP). This participative approach not only provides excellent interface with customer but also gives them the insight into the intricacies of product enabling them responsible use of the product

BSC and CRISP boards are used for display of manufacturing targets/ status on the shop floor at prominent locations. The day to day goals are communicated through the DWM process and the deviations in the day to day achievements are periodically analyzed and reviewed for corrective actions. The manufacturing processes are continuously improved upon with an aim to reduce rework/ rejections and improve cycle time. Six Sigma approach has been extensively applied and it has resulted in containing cost of rework/ rejection this year (Fig. 9.18, Fig. 9.19).

Fig 5.9: Production, Delivery and servicing process

Work Order (Specification of customer and

requirement)

Engineering group

evolves design

Conversion of design into manufacturing drawings, GES, MID, test instructions etc.

and material procurement information

Planning and Material

procurement

Manufacturing/ testing

and inspection Shipping

Customer

Commissioning/ Servicing by

service cell if required

Technology group evolves Manufacturing

process

Processes


The transportation requirements from BHEL Bhopal to site/ customer premises are specifically designed and multimodal (rail, road, sea and air) transport logistics are employed as the products are unique not only in terms of size, weight, volume etc. but also with regards to site requirements and site accessibility. Rate contracts are entered into with the logistics providers based upon their competence and fleet availability. In order to overcome handling and transport limitations of hydro products to remote sites and also enable cost reduction a unique approach of fabrication at site has been adopted. Timely and safe delivery of products is monitored and is one of the parameters of service providers as well. Based on the customer feedback on delays in transportation the entire despatch process was reviewed by a CFT in 2007 which identified the reasons and also suggested for a total revamp of terms and conditions of existing transport contracts. This was based on the study of current market realities, contracts of other companies such as L&T, Siemens and some FMCG companies, transporters needs and expectations etc. Accordingly, the changes wrt segmentation of loads, area of destination, size of consignments, detention charges, minimum distances, etc were incorporated in the rate contracts. This enabled not only in timely delivery but also same day lifting of consignments resulting in improved cash collection (Fig 9.26) and resultant cash surplus. (Fig 9.25)

Product-wise service groups and regional service centres (Fig. 5.11) cater to service requirements of customers. In addition to this, the service centres are also located at customer‟s works viz. service centres for Traction equipment are located at ICF Chennai, DLW Varanasi, Kolkata and Mumbai.

BHEL also provides need based round the clock services through outsourcing to competent service providers e.g. the specific requirement of Central Railways for maintaining their un-interrupted EMU services at Mumbai has been outsourced. These service providers were initially associated with BHEL engineers at site and trained to operate independently. Similarly the requirements of transformers are handled through servicing at site. To improve customer‟s knowledge on operations of our products and to address common service problems, Audio-visual CDs have been prepared for multimedia training to customers on common site problems of HT motors, OLTC, Switchgears etc. The services group receives after sales service requests either directly or through marketing and sales divisions. These service groups monitor number of complaints received, response time and resolution time for corrective actions and improvements (Fig. 6.11). Service data is collected and analysed by service cell and is discussed in DRC/ PQG meetings and is used in design improvements. The efforts initiated for service support has resulted in improved perception of customers over the years. (Fig 6.1a) Customer trainings (Fig. 6.12) and RLA studies are also organized on proactive basis. Erection and commissioning services are offered as part of contract.

For Projects, three level networks are prepared at corporate level, unit level and department level respectively and are available on line through VPN. Technical and commercial closure issues are available on line and are also part of BSC objectives. Contract Management Group, CMG, and Project Management Group, PMG, enable resolution of inter unit and business sector interface leading to sequential deliveries and project management. Project review meetings for hydro and thermal projects are held monthly to review timely deliveries. The need of holistic project management was identified in Manthan 2007 which led to development of an on line system of customer specific project monitoring by a CFT led by GM Hydro. This system enables availability of on line status of despatches to all concerned divisions and erection agencies. The result of the structured approach is evident from the improved delivery performance by all product areas (Fig 6.5). Targets for improvement in timely completion index and sequential delivery index are set and monitored leading to improvement in delivery indices (Fig 6.6). This has resulted in improvement in customer perception on all parameters of delivery. Fig (6.1a)

5e. Customer relationships are managed and enhanced:

The resolution “Kadam Kadam Milana Hai, Grahak Safal Banana Hai” of BHEL Bhopal is the driver of customer relationship management. A network of offices spread through-out the country further facilitates management of customer relationships. It helps in day to day contact with different customers situated far and wide (Fig. 5.10). Customer Relationships are managed and enhanced at BHEL, Bhopal through well defined processes (Fig. 5.11). Since the products are customer specific, the specific requirements are captured during pre and post contract reviews and customers are involved at all stages.

Processes


Fig. 5.10: BHEL office network

Service centres - 15 Major cities Service centres - Customer premises Regional operations division, ROD – 18 cities Repair shops – EMRP Mumbai & HERPVaranasi Power Sectors, PS – 4 regions Industry sector, IS New Delhi International Operations Division, IO, New Delhi Customer offices in BHEL Bhopal premise

Technical and service support through services group and designers‟ visits to site, prompt complaint resolution and non-agenda visits of senior management to customer works are other measures for building customer trust.

Service cells carry out the trend analysis of complaints and the data is monitored and presented for remedial actions. For example the six sigma project on reduction in site complaints for switchgear & traction products have resulted in significant improvements. Many such focused approaches have resulted in continuous downtrend and containment of critical complaints (Fig. 6.7). Business Sector, ROD meets, PC/ TC meetings enable in understanding general customer requirements, expectations, concerns etc. This results in joint improvement projects (Fig 9.21) and/ or partnership opportunities (Cr 4a). Strategic decisions for support to existing and potential customers also emerge in these meetings. e.g. supply of spares and R&M of non BHEL sets of thermal equipment, repair of ABB make traction motors for rehabilitation of imported locos etc. and repair of Non BHEL equipment through reverse engineering methodology. Customer relationships are also enhanced by fulfilling specific customer needs e.g vendors are jointly developed and approved for specific projects.

Structured system for capturing customer perception and improving the same has been in place since 2000. The External customer perception surveys were initiated on a pilot scale in 2000 for two products and have been extended to all products since 2003 with defined objectives. (Fig. 5.12) covered all products. The survey findings are presented to Top Management and all product groups and action plans for improvement are prepared in workshops facilitated by the consultant. Implementation of action plans (Fig 6.3) as a sequel to Customer Surveys has resulted in improvements in the customer perception index (Fig. 6.1a, b). Some of the actions completed as a sequel to surveys are illustrated (Fig. 5.13). Specific customer oriented web portals have been developed by product groups to provide product specific details e.g TPTN Division has a portal for

PROCESS OBJECTIVE SPECIFIC TOOLS REVIEW MECHANISM OUTCOME

Pre-Contract Review

Capturing Customer needs and expectation

Pre-Contract Review (CMI:3305C)

Check-list as per DWI Customer requirements against tender enquiries are noted, understood and informed to Engineering and others

Pre-award meetings and discussions

Capturing Customer needs and expectation

Pre-award meetings

Review of Cust. Reqmts vis-à-vis offered Comments/Deviation

Customer requirements are proactively understood, discussed and clarified before Contract finalisation

Post-Contract Review

Understanding Customer needs & expectations

Post-Contract Review (CMI:3305C)

Contract Review meetings & exchanges

All Customer needs and expectations are fully understood and translated by all concerned Divisions.

Contract-execution Review

Monitoring progress Contract Review (CMI:3305C)

Periodical Check-list Monitoring

Progress of Contract is continuously monitored for meeting Customer expectations and customer updated.

Routine interaction with Customer

Determining day-to-day Customer requirement

Phone, Fax, E-mail, Web-Site, Customer visits, meetings

Day-to-day review by Commercial Executives / Group Heads / HOD Commercial

Day to day Customer requirements are catered through PSCM/SAS/IS/ISBG/ISG/RODs/IOD as front-end Customers (CMI:3001) as also by Product Commercial Group.

Resolution of Customer Complaints.

Redressal of Customer Complaints

Customer Complaint registration and handling system

Customer Complaint analysis, Response Time & Resolution Time index

Complaints/site feed-backs are registered, analysed and resolved. Response Time & Resolution time indices Complaints are graded on 10 point scale

Customer training Programmes, symposium

Interaction with Customer on product attributes, services, and new product s

Customer training Programs/Seminars/Symposium/ Plant Visits

Structured inputs on product attributes with interactive feed-back sessions

Structured Customer Training Programs (ref6b) Customer expectations are understood through targeted Symposiums

Interaction with Business Sectors

Interaction with front-end Customers (Business Sectors)

Business Sectors meets, Product Committee Meetings

Discussions & analysis Business Sector Meets cater to Customer Feedbacks in different market segments. Product/ Technical Committee Meetings for evolving mid-term & long-term strategies.

Fig 5.11 Customer Relationship Management

Processes


Transformers Transportation Electrical Machines Switchgear Hydro

Ensuring manufacturing status transparency through web based system.

Prioritisation of manufacturing based on customer requirements.

Weekly monitoring of completeness of dispatches.

Online monitoring of drawings and documents submitted for customer approval.

Improvement in customer co-ordination at site by training of contracted staff, deputation of expert service engineer and montly visit of senior officers.

Accurate forecast of by commercial department about month wise customer requirement.

Advance material planning.

Manufacturing scheduling to meet delivery commitments.

Monitoring of assembly, testing and handing over on daily basis.

Submission of 3D models of machines to customer for ensuring correct fitment in locomotive.

Completion of on-going capacity augmentation plan. Policy for spares pricing and periodicity of review to be finalised in co-ordination with EMRP & SSBG. All major failures to be discussed in RCA/DRC and the action to be communicated to customer. System for expediting issue of WO to engineering and monitoring of dispatch.

A customized comprehensive system in Nirantar software put in place for complaint recording, resolution, analysis and region wise categorisation.

Latest drafting software are now being used to obtain quality output documents, i.e. project drawings and instruction manuals.

Bar charts is being furnished to customers for close monitoring of all activities to bring transparency in status of manufacturing.

Regular meetings are being held with customers for status review.

A separate cell has been constituted in SCS to address the issue related to service after sales.

All customer correspondences are responded within 3 days. Only white prints (not ammonia prints) are sent to customer. Design review of all major assemblies are done. Contract review done before taking up design work.

Fig. 5.13: Actions completed as sequel to external customer survey: 2007

Assess the needs, requirements and the expectations that customers of BHEL – Bhopal have across product categories

Assess the current satisfaction levels Determine the relative impact of these expectations on the

overall customer satisfaction & loyalty Identify the strength and weakness vis-à-vis competition Provide strategic directions for improvement in the critical

areas and identify leverage able opportunities Calculate the CSI (Customer Satisfaction Index) To provide baseline for future monitoring

Fig: 5.12 Objectives of Customer satisfaction survey

easy access of service bulletins, maintenance manuals and also to register online feedback/ complaints. In order to educate customers on use and maintenance of equipment, structured training programmes are planned on O & M aspects of products. (Fig 6.12) Major customers have been provided fully equipped offices within the premises to enable continuous association in all stages. Complete transparency is maintained in manufacturing processes and these are open for audit by the customers e.g. Railways, POWERGRID and NTPC conduct regular audits. In addition to this, regular structured meets with customers like DLW, CLW, EMU & DEMU coordination meetings with Railways, meetings with NHPC, NTPC, POWERGRID, PSNR, PSER etc are held and feedback is utilized in improving products and services. The approach for managing and improving processes and customer relation management is reviewed and improved continuously (Fig 5.14) resulting into customer continued relationship with all major customers. (Fig 6.15)

2001-2002 2003-2005 2005-2007 2007-08

Process Mapping completed in EM, HG and TCB

KPIs identified

ISO 14001 certification

CDs on Switchgears, OLTC and Motors

System for Capturing Cost Of Quality put in place

System for CSMM put in place ISO 9001: 2000 & OHSAS 18001

certification KRA Library formulated from

roles of various functions

External Customer survey for all products

BSC and eMAP for policy deployment

Design to Cost implemented

Lean management Six sigma implemented

BPR prior to ERP

IMPRESS for all employees

e-MAP refined

DWM(daily works management)

SAP HR

Mentoring for engineer trainees

Customer web portal

Uniform production to meet delivery schedule.





Customer Results


Parameters BHEL- Bhopal Index BM/2nd Best CSI

2000 2003 2005 2007 2000 2003 2005 2007

Price 47 38 57.6 66 57 38 64.2 60

Equipment Quality

- Engineering & Manufacturing 67 67 68.4 71.6 72 74 67.7 74.5

- Equipment & System Performance 63 63 64.8 61.2 72 78 67.4 74.7

Delivery

- Project Coord. & Mgmt. 56 56 64.7 71.7 63 70 67.3 77.9

- Erection & Commissioning 65 65 70.7 70.6 63 69 68.4 75.5

- Delivery 54 54 63.1 66.3 67 71 63.7 76.4

Service after sales 49 55 62.0 62.0 64 65 58.6 74.5

CSI - 55 63.6 68.9 65 63 65.8 76.4

CSI Target - 50 60 65

Fig. 6.1a: Customer Satisfaction index –External survey

6. CUSTOMER RESULTS

6a. Perception measures:

The slogan of BHEL, Bhopal (Cr. 1a) “Kadam Kadam Milana Hai, Grahak Safal Banana Hai” signifies

the perception towards customer. “Strict adherence to commitments” and “Ensure speed of response” are values of BHEL. Major customers like Indian Railways, POWERGRID, NTPC, NHPC, PGCIL, SEBs, IOC, ONGC, Tata steel, Grasim, Ultratech, JP Cement etc. have been regular customers since their inception and have continued to remain loyal with BHEL in spite of liberalisation and presence of multinationals. The impressions of some of the valued customers as given below indicate BHEL Bhopal‟s commitment to its philosophy of customer‟s success.

Project Manager CSEB, Korba in his letter dated 19.03.08 addressed to GM(EM) “…we are pleased to place on record the appreciation for the excellent job done by you in the concluding part of the financial year when the entire attention is on regular production. This effort has helped the people of Chattisgarh to overcome the power crisis in the coming summer months.”

Shri S.M. Bhardwaj, GM-DLW and his team has highly appreciated BHEL‟s effort for remarkable improvement in supply position (98% on-time delivery) of traction machines in year 2007-08 and also resolution of technical points during the meeting with ED,BHEL, Bhopal and GM(TPTN & CET) held at DLW, Varanasi on 20-05-2008.

Shri P. Krishna Rao, General Manager of ONGC in his letter dated 6th Feb‟‟08 to ED BHEL Bhopal acknowledged commendable site services provided by control equipment engineering of SCR group in trouble shooting of imported control system from National Oilwell Varco (NOV), USA. He has termed this as a mark of excellent quality services provided by BHEL.

Perception of the customers is being captured both directly (customer survey) and indirectly (appreciations, repeat orders etc) (Cr 5e).

External Customer Survey:

External Customer Survey was conducted first time by external consultant in 2000-01 for „Projects‟ and „Transformer and Motor‟ products. Since then, external surveys covering all products are being conducted every alternate year (Fig. 6.1a, Fig. 6.1b). The customers are selected and chosen for survey based on certain parameters such as volume of business, criticality and potential of business etc. The results and feedback of the survey are showing encouraging trend. Product-wise follow-up workshops are held to understand the finer issues of outcome of survey. The areas for improvement are identified, prioritised; action plans are made and reviewed. Targets are set for improvement and validation is done through results of next survey and also through indirect indicators and measures (Cr. 6b).

Customer Satisfaction Index (CSI) is arrived at by weightages given by customers to identified factors. Positive trend (Fig 6.1a, 6.1b) exceeding the set targets of CSI indicates effectiveness of actions taken as sequel to surveys e.g. inspite of intense competition in Switchgear, the product has re-emerged as a benchmark product (it was benchmark product in 2003 survey also). The leading market share of switchgear (Fig. 9.12) corroborates the customer preference. 81% customers favour continuing the relationship with BHEL, Bhopal (Fig. 6.1c).

Customer Results


Fig. 6.1c: Customer’s view on continuing relationship with BHEL, Bhopal.

Yes

81%

Can not

say

15%

No

response

3%No

1%

Hydro Electrical machines Transformer

Switch gear, control gear and rectifier Transportation Fig: 6.1b Product –wise CSI

Group Total Issues

07-08 08-09

Target Implemented In progress

Hydro 10 4 4 6

Traction 19 3 3 16

Motors 10 5 5 5

SWGR 20 16 16 4

TRFR 10 8 8 2

TOTAL 69 36 36 32

Fig. 6.3: Implementation Status of Action plans)

Survey 2003 Survey 2005 Survey 2007

Strengths Areas for Improvement



Ordering / tendering process

Engineering and Manufacturing

Erection and commissioning

Leaders in the Industry-BM in switchgear products

Ethical/ follow fair practices

Delivery Contract execution

/ project management

Service After Sales

Technical capability

Reliability of equipment.

Safety aspect of design.

Confidence of support beyond warranty period.

Delivery

Service after sales:

Timely availability of spares.

Quality of O & M manual.

Project Management

Price

Manufacturing-testing , measuring facilities, in-house manufacturing

Pre contract - Technical Capability, Adherence to specification

Performance & warranty-site maintenance trg., responsiveness.

Service after Sales – Price of service supervision, availability of old design spares

Fig. 6.2: Strengths & Opportunities for Improvement

Action plan based on results of external survey:

Based on the survey, the strengths and the opportunities for improvement are identified (Fig. 6.2) and product group-wise short & long term action plans for improvements are formulated.

Internal Customer Survey:

Prior to external surveys, internal customer surveys were conducted in 1998, 1999, 2001 and 2002. Perception was collected from business sectors, marketing divisions, sister units, regions and internal departments who were in direct contact with customers. Based on the findings of earlier survey of 2005, product-wise actions needing attention were identified and actions taken (Cr. 5e). The product group wise implementation status of action plans is illustrated in Fig. 6.3. As a result, the CSI has improved in 2007 (Fig. 6.1a).

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Customer Results


Other measures to get customer perception: Through continuous interactions with resident customer representatives posted at the works. Through interaction during customer training programmes and formal and informal customer

visits. 37 such training programmes were organised during last year which were attended by nearly 874 customer representatives (Fig. 6.12).

Repeat orders/ new orders from new customers/ new business and appreciation (Fig. 6.4).

Performance indicators:

BHEL, Bhopal has put in place various internal performance indicators of Customer satisfaction for which the targets are set and monitored at product/ unit level.

Product benchmarking

The Product Bench- Marking data are maintained by respective Engineering Heads (Cr.4d) and are not in public domain e.g. based on Power generation capacity, head and RPM of hydro turbine, the efficiency of this equipment becomes the benchmark parameter. Similarly for transformer, iron loss, noise level and short circuit test etc are benchmarking parameters. This data confirms the benchmark status of BHEL products or near par status with best in class. Timely Delivery Delivery performance: The data on delivery performance indicates positive trend over the years (Fig. 6.5). It is the ratio of No. of packages delivered on or before time to total no. of packages due for delivery.

Fig. 6.4: Examples of Repeat/ New orders, Customers’ appreciation received

Electrical Machines

Appreciation letter from Project Manager, CSEB, Korba for speedy repairing work of PA fan motor of 2x 250 MW power unit.

Repeat orders from IOCL, power utilities, Bangladesh etc

Order from Kosti, Sudan Hydro Turbine/Generator

Order for 4 nos. of turbines of 130 MW each for Parbati Stage -3 project.

Order for 5 nos. turbines of 30 MW each for Kalwakurthy Stage -3 project.

Repeat orders for spare runners for Dehar, Rangit and Kopili projects. Switchgear & Control equipments

Appreciation letter Surat Lignite customer, Ethoipa customer

Repeat orders received for following power projects from same customers Parli, Paras, Kothagudam, Santaldih, Rayal Seem ,DVC Mejia,HEG Mandideep, Bellary Khaperkheda, Bhusawal.

Performance certificate showing confidence in BHEL issued by IOCL for digital AVR.

Repeat orders for AVR from HPGCL,IOCL , Large current rectifier from GACL, Oil rig controls from OIL India, Aux converter from CLW. Transformers

New Orders from TATA Project Ltd. for 80 MVAr Shunt Reactor, from AHPCL Secunderabad for 12 X 35 MVA Generator Transformers

Export Order from Azerbaizan for 2X 240 MVA ICT

Order from Adani Power Ltd. for 2 no 400 MVA GT (highest ever rating ), 2 nos. 315 MVA ICT and 3 nos. 50 MVAr Shunt Reactor

Repeat Order from APGENCO for 240 MVA GTand 31.5 MVA Station transformer, KPCL Bellary for 4 nos 207 MVA Generator Transformers and from CSEB Korba West for 250 MVA GT

Transportation

Appreciation letter from RITES for commissioning of cape gauge DEMU at CSM,Lubango, Angola Railways.

Appreciation letter from chief of Senegal Railway delegation for customer training provided at DLW,Varanasi.

Repeat orders from Indian Railways for 5 sets of Traction Equipment of High HP DEMU for J & K.

5 sets of Traction Electrics for DEMU and 11 sets of Traction Electrics for 2300 HP loco for Angolan Railways.

Repeat order of 173 sets of electrics for 25 kV AC EMU for Indian Railways.

Customer Results


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Hydro 2 2 1 2 2

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TCB 2 0 1 2 1

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TPTN 2 0 2 0 0

Fig. 6.7: Critical Customer Complaints (nos.)

Product/ Year

Timely Completion

03-04 04-05 05-06 06-07 07-08

EM 0.02 0.02 0.03 0.03 0.02

TCB 0.08 0.08 0.06 0.06 0.06

SCR 0.35 0.25 0.20 0.18 0.17

TPTN 100 % Delivery on Time

Fig. 6.6a: Delivery indices-(lower the better)

Fig. 6.8: Special Initiatives having customer focus

Service in a day for Railways to reduce downtime of Locomotives at Ghaziabad and Ajni.

Subcontracting site support service to cater for round the clock (24x7) service requirement for Railways in Mumbai.

Escorting transformers during transportation to site for continuous monitoring of Nitrogen pressure.

Free service in many cases even after expiry of warranty period.

Residual life assessment (RLA) and Conditioning Assessment (CA) of thermal power plants

Enhancement of Life expectancy of transformer through planned visit.

Outsourcing of service supports to experts developed by BHEL e.g. in case of SCR, Motors & TPTN.

Product/ Year

Timely Completion Sequential Delivery

03-04 04-05 05-06 06-07 07-08 03-04 04-05 05-06 06-07 07-08

Hydro 0.011 0.021 0.022 0.020 0.018 0.052 0.069 0.044 0.03 0.028

Fig. 6.6b: Delivery indices - (lower the better)

Delivery performance of Transportation and Hydro groups has been 100% or more and there is marked improvement in case of Switchgear and Transformer products over the years. This has been possible due to thrust given on improvement of cycle time with help of Six Sigma projects and through timely completion and sequential delivery. Improvement in processes such as material procurement, engineering information and manufacturing information system has also contributed to improvement in delivery performance (Cr. 4e, Cr. 9b).

Indices for Timely Completion, Sequential delivery and incomplete supply: Timely Completion is a measure of on time supply of each physical unit while sequential delivery is a measure of sequential delivery of each physical unit and is applicable in case of Hydro product only (Fig. 6.6a & 6.6b).

Complaints and complaint handling – Trend of customer complaints:

The critical customer complaint data (Fig. 6.7) indicates robust performance of design and manufacturing processes. Involvement of customers at all stages (Cr. 5e, Fig. 5.11) and customer training on maintenance and upkeep of equipment etc has also helped in trouble free service of equipment. Numbers of customer focussed special initiatives have been taken to provide better After Sales Support (Fig. 6.8).

Failure Analysis of BHEL Bhopal make Transformers:

Transformer is a star product of BHEL, Bhopal and massive investments are underway for capacity enhancement as the present capacity is totally booked and Customer orders for repeat and new business (reflecting customer confidence in the quality and service of the product) are to be adhered to. The failure vis-à-vis CIGRE norms and acceptance in Short Circuit tests at KEMA, Netherlands vis-à-vis KEMA records are a testimony to the preference of the customer (Fig. 6.9, Fig. 6.10).

Customer Results


Product Nos. 03-04 04-05 05-06 06-07 07-08

EM Trg. programmes 3 3 4 4 6

Persons trained 96 86 125 120 187

TCB Trg. programmes 3 5 4 1 6


SCR Trg. programmes 5 5 6 10 14

Persons trained 150 135 155 201 240.

TPTN Trg. programmes 4 5 9 4 10


Hydro Trg. programmes 2 1 1 6 1


Fig. 6.12 Customer training

After sales support- Response time and resolution time:

The data on average response time and resolution time (Fig. 6.11) shows substantial improvement. It is the result of several customer focussed initiatives. IT enablement of registration and response process has helped in reduction in response time.

Training programmes for customers:

Training programmes are organised regularly on proactive basis for giving inputs on use and maintenance of equipment to the customer (Fig. 6.12). Training imparted to Senegal Railway delegation for traction products and PGCIL engineers for TCB products were highly appreciated by the customer. Training material is now made available in electronic media to all participants.

Customer loyalty - Repeat business and new business:

Repeat Business (Fig. 6.13) is defined as business obtained from those customers who go for expansion or have recurring requirements for previously ordered product(s). Business obtained from new customer and/ or existing customer, for the product previously not ordered on BHEL is taken as New Business(Fig. 6.14). BHEL Bhopal, has been able to continuously capture additional business by adopting strategy of flexible pricing. Groups have secured repeat orders due to quality of the products and prompt After Sales Service. The groups have been able to capture new orders due to proactive marketing efforts and due to the trust of the customer in engineering capability of BHEL, Bhopal.

Product/ Year

Response time Resolution time

03-04 04-05 05-06 06-07 07-08 03-04 04-05 05-06 06-07 07-08

Hydro 1.25 1 1 1 1.0 155 140 123 62 58

EM 2 1.7 1.4 1.4 1.3 12 9.5 11 10 10

TCB 1.5 1.3 1.2 1.0 1.0 12 11 10 8 8

SCR 2 2 1.2 1.25 1.5 25 59 51 48 70

TPTN 3.6 3.3 2.0 1.9 1.17 45 67 53 41 40

Fig. 6.11 Average response and resolution time (no. of days)

03-04 04-05 05-06 06-07 07-08

Percentage failure of Transformers in operation 0.3 0.11 0.18 0.25 0.2

International Transformer Failure Rate-2% -CIGRE Report

Percentage Failure of Generator Transformers in operation 0.59 0.37 0.71 0.30 0

CIGRE Norms –Failure Rate – 3 %

Fig. 6.9: Transformer Failure rates

Fig. 6.10: SC Tests Acceptance Rate

BHEL-Bhopal sets the Benchmark In 2005-06, Out of 17 Transformers, 11 nos. passed in first go %age success - 64.5%. In 2006-07, Out of 18 Transformers, 11 nos. passed in first go %age success - 61.1%. 6 Transformers were tested for Short Circuit forces at KEMA Laboratory, Netherlands / CPRI Bangaore in 2007-08, 5 have passed the

test based on the % impedance value. Success rate 83.3%. As per KEMA, 10 out of 36 transformers passed in first go. Hence %age success rate is 27.8% internationally.

Customer Results


Customer Products Duration of

relationship (Yrs)

Railways Traction machines, control gear >45

NTPC Transformers, motors, switchgear, Hydro equipment

>30

Powergrid Transformers, switchgear >15

NHPC Hydro equipment >30

SEBs Transformers, switchgear >40

ACC Motors >40

Grasim Motors >15

Jaypee Motors >15

Fig. 6.15: Customer retention & duration of relationship

The repeat and new business has been given for TCB products in physical terms as the current prices of these products are much lower and not comparable to earlier years due to cut-throat competition in this field. There is increase in both Repeat business and new business in most of the products as compared to last year.

Hydro Electrical machines Transformer in MVA

Switch gear, control gear and rectifier Transportation

Fig: 6.13 Product –wise Repeat Business in Rs. Lakhs

Hydro Electrical machines Transformer in MVA

Switch gear, control gear and rectifier Transportation Fig: 6.14 Product –wise New Business in Rs. Lakhs

Customer retention, duration of relationship & effective recommendations Customer loyalty is also reflected through retention of all major customers (Fig 6.15) eg. Indian Railways, NTPC, POWERGRID, ACC, Jaypee are major customer since their inception. Trust of customers is reflected through effective recommendation by customers eg. NTPC Hydro business reflected its trust BHEL Bhopal by placing orders for its maiden venture based on its experience of products for thermal stations.

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People Results


Recognised as Study Source

Star PSU Company Business Standard (March 2007)

3rd best company (infrastructural group) Business World (5th June 06)

7th Best Employer (Nation wide survey representing all sectors) Business Today & Hewitt Associates (Business Today 5th March 02)

Fig. 7.2: Benchmark study conducted by business magazines

Year % Respondents Score

2005 13.84 6.98

2007 18.16 7.11

Fig. 7.1c: Leadership Effectiveness Survey

7. PEOPLE RESULTS 7a. Perception measures: A system is in place to capture feedback of employees through employee perception survey which are conducted regularly (Cr 3a). The segmented results are presented in Fig 7.1a.

Parameters

Average Merit Score (AMS)

Executives Supervisors Others

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Working Environment. 5.67 6.60 5.41 5.06 5.72 5.56 6.06 6.77 6.69 6.7 5.08 5.99 5.67 6.11 6.12

Communication 5.98 6.69 6.19 6.35 6.74 5.55 5.79 7.04 6.69 6.72 5.39 5.58 5.67 6.36 6.4

Tar. setting & Appraisal 5.67 6.44 5.12 5.26 5.74 5.65 5.69 6.87 6.76 6.59 5.56 5.53 5.53 6.54 6.62

Training and Retraining 4.93 5.70 5.17 5.55 5.24 5.02 5.36 6.69 6.40 6.77 4.95 3.35 5.24 6.23 6.5

Career Dev. 5.14 5.44 5.46 5.70 6.35 5.10 5.19 7.08 6.57 6.46 4.89 5.00 5.7 6.56 6.21

Reward & Recognition 5.34 6.19 5.74 5.91 5.42 5.41 5.26 6.9 6.43 6.39 5.12 5.33 5.84 6.17 6.22

As a result of planned efforts, there has been an overall improvement in average satisfaction index. Working Environment, Target Setting & Appraisal, Training & Retraining and Rewards & Recognition were taken as area of improvement, based on 2005-06 survey results. Communication, being considered as a very important process for improving employee morale, has been kept as an area for focussed improvement. The survey of 2007-08 shows improvement in all the six identified areas compared to the last measurement. The actions planned as sequel to 2007-08 survey are illustrated in Fig. 7.1b.

Leadership Effectiveness Survey (LES) is conducted periodically to provide feedback to Top Management on Leadership style (Cr. 1a). The results of recent survey show an improvement over the previous year (Fig. 7.1c).

BHEL is included in benchmark studies conducted independently by Business Magazines. The results (Fig. 7.2) indicate show the high recognition levels.

Parameters Average Merit Score (AMS)- Overall

02-03 03-04 04-05 05-06 07-08

Working Environment 5.25 6.22 5.95 6.13 6.18

Communication 5.51 6.02 6.30 6.55 6.62

Target setting & Appraisal 5.59 5.89 5.84 6.18 6.32

Training and Retraining 4.96 4.80 5.70 6.06 6.17

Career Development 4.96 5.21 6.08 6.27 6.34

Reward and Recognition 5.20 5.59 6.16 6.17 6.01

Avg. Satisfaction Index 5.17 5.71 6.01 6.22 6.27

Target 5.5 5.8 6.0 6.2

Fig 7.1a : Analysis of survey response

Improvement in work environment - Upgradation of annexes and work places, improving aesthetics and up-gradation of public utilities, centralisation of functions like all HR services at one place, modernisation of canteens, Training & Re-training - Competency based training both on functional & managerial competency, multiskilling of inductee artisans in addition to regular employees, knowledge worker training, adventure based outbound module for Sr. DGMs & AGMs, sponsoring employees for technical training & seminars, Personality Development and English spoken courses for employees. Target Setting & Appraisal - Balance Scorecard concept extended to sectional head level, identification of developmental needs, BSC evaluation method reviewed and modified, behavioural traits rating introduced Reward & Recognition – Reward Scheme for individual and group excellence, BHEL IPR incentive Scheme, Differential performance payment introduced, Re-designation of supervisors, Reduction in eligibility period of promotions, Ad-hoc payments, linking PP payment with BSC, Impress Scheme, recognising efforts through display of photographs on CRISP Board, Communication - Employee centric information –alert messages through SMS/email in addition to access through Intranet, E mail & internet facility to all executives, PCs for all executives, Mobile provided to executives, CRISP Boards, MECOM etc.

Fig. 7.1b: Actions taken as sequel to survey, feedback and FGDs

People Results


Year 03-04 04-05 05-06 06-07 07-08

Bud. 30 35 35 50 55.66

Act 24.75 25.12 46.39 54.56 56.65

Fig. 7.3d: Training investments (Rs. Lakhs)

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Fig. 7.3c: Nos. of Employees sent abroad for training

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Upto 03-04 Upto 04-05 Upto 05-06 Upto 06-07 Upto 07-08

Fig. 7.3b: Multiskilling - Cumulative TMD/ Employee

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Actual 1.83 3.23 3.63 3.86 8.95

03-04 04-05 05-06 06-07 07-08

Fig. 7.3a: Training mandays/ employee

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In addition to the regular perception surveys, a dipstick survey has been done on major HR initiatives undertaken in recent times. The results show a high level of satisfaction on the initiatives taken. Based on this survey segmented analysis has been done and opportunities for improvements identified.

Parameters- workers % Parameters – Supervisors % Parameters – Executives %

Period of DR/CW service 97 Re-designation 95 Magazine allowance 92

Increase in reward amount 99 Weightage in promotions 77 BHEL IPR incentive scheme 94

Interest subsidy on car loan 98 Reduction in period of absorption 71 Differential & Higher PP &SIP 87

Increase in amount of PP & SIP 98 Interest subsidy on car loan 96 mobile facility 77

Increase in group insurance amount 98 Increase in amount of PP &SIP 72 Clubbing of telephone charges 77

Increase in amount of new year gift 98 Increase in reward amount 86 Mentoring scheme for ETs 94

Increase in amount of gift cheque 95 Increase in amount of new year gift 85 Increase in amount of new year gift 66

Increase in group insurance amount 89 Increase in group insurance amount 97

Increase in amount of gift cheque 87 Increase in amount of gift 88

SATISFACTION LEVEL 97.57 84.22 86

Fig 7.3 : Dipstick survey ( % satisfaction)

7b. Performance indicators: Levels of Training and Development: The need for training and development is identified through a well established process (Cr. 3b).

Training & Development has also been identified as an area for improvement as sequel to employee perception survey of previous years. (Fig 7.3a) Ambitious targets were set for 07-08 and these have also been exceeded as a result of focussed training on new initiatives such as DTC, LEAN, multiskilling etc. The cumulative training mandays for multiskiling is showing an increasing trend over the years (Fig. 7.3b). The Knowledge Worker program has brought the classroom teaching to workplace since 2005-06. Till now 4322 workers/ supervisors have participated in the programs and all the work centres have been covered. All employees are trained on MBE, ISO 9001 and OHSAS. These efforts have resulted in continuous improvement of scores on training and retraining in employee perception. Employees are regularly sent abroad to learn and absorb new skills and knowledge for keeping abreast with latest technology (Fig. 7.3c). The entire data (segmented division wise, category wise etc.) related to training is available on intranet. This year 224 employees were deputed for specialised training to various programmes in institutes spread across the country. Special programmes are organised for focused groups for eg. training on life planning for workers and supervisors (05 Programme covering 434 employees) were organised this year. The programmes aimed at preparing employees for leading a better life post retirement. They were trained on management of retirement benefits for sustained income. Training investments in BHEL Bhopal has been increasing over the years as a result of focus on training and development (Fig. 7.3d) and technology absorption and/or training for operations and maintenance of plant and equipment procured for capacity enhancement, a CSF of the unit.

People Results


Year 03-04 04-05 05-06 06-07 07-08

Nos Of QCs 148 152 169 171 179

No Of individuals 1282 1352 1502 1515 1582

Prizes (Rs. Lakhs) 1.41 1.83 2.2 2.46 2.46

Fig. 7.5b: Quality Circles

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Fig 7.5a: PIPs

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Award Year

Padam Shri - Shri B L Chouksey 2005

Best Disabled Employee - Lt. Shri R C parakh 2005

Prime Minister’s Shram Veer Award - Shri B L Dhruv and Shri S K Soni

2004-05

Shram Shree Award - R K Tripathi 2005

Vishwakarma Rashtriya Award - Shri Jitendra Singh 2006

Uttam Shramik Award - Shri V.K. Pagare 2004-05

Fig. 7.4a: National Awards won by employees

Recognition of Individuals and Teams: Employees of BHEL Bhopal are motivated for developing their skills and improving their performance. They are encouraged to participate in all India / state level awards. The recognition by Government of India (Fig 7.4a) and State Government not only brings pride to the company but also speaks of the effort put in by the organisation.

Employee suggestions are invited and based on their merit suggestions are implemented and rewarded. The Suggestion Scheme has been awarded 2nd Prize under INSAAN award for excellence in year 2004-05. The saving accrued through suggestions is illustrated in Fig. 9.39a.

‘Swasth Karamchari Samman’ was instituted for creating awareness towards healthy living by rewarding employees on predefined criteria. (Fig. 7.4b)

Involvement in improvement programmes: Impress projects are taken up every year since 2004-05 (Fig. 9.39b). 534 projects have been registered in 2007-08 and pre-evaluation award of Rs. 48500 has been given to 485 projects and Rs. 59000 has been awarded to 24 projects, which led to the accrued savings of Rs. 48.18 crores.

Productivity Improvement Projects(Fig. 7.5a) are identified every year by all the product/ function groups along with envisaged tangible and intangible benefits. Instead of going in for higher number of projects, emphasis is laid on selecting projects focussed on higher savings. Since most of the projects are getting registered in the Impress scheme, PIPs have decreased since 2005-06.

Quality Circles The QC concept was pioneered by BHEL in the country in early eighties. The movement has taken deep roots with the commitment and involvement of top management (Fig 7.5b, Fig 7.5c). The data for saving accrued through quality circle projects are given in Fig. 9.39a. A unique feature of quality circle movement in the unit is the creation and active participation of a large number of circles from Functional areas, Medical group and also from Town Administration, Canteen, Publicity department, Finance department etc.

Fig 7.5c: Achievements of Quality Circles

2007-08

Quality Circle No. 541 of Pathology department and Quality Circle No. 125 of PRM department participated in National Convention of Quality Circles of QCFI held at Kolkata from 26th to 30th Dec.’07. Both were placed in Distinguished category.

Quality Circle no. 236 of SCR, Quality Circle no. 12 of TAD and Quality Circle No. 14 of TRM participated in Regional Quality Circle Convention of CII organised at Bhopal on 26th Oct.’07. Quality Circle no 236 of SCR won second prize in the convention.

2006-07

Quality Circle No. 88 of FBM was placed in Excellent ‘ category, Quality Circle No.236 of SCR , Quality Circle No. 12 of TAD and Quality Circle No. 260 of SCR were placed in ‘Distinguished’ category, while Quality Circle No. 524 of QC-TCB and Quality Circle No. 601 of Fin. were placed in ‘Meritorious’ category in the National Convention of Quality Circle Forum of India (QCFI)

Quality Circle No. 541 of Pathology department was declared winner in Support Services category in Quality Circle Convention organized

by Bhopal Chapter of CII.

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Fig. 7.4b: Persons awarded as Swasth Karmchari (Cumm.)

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People Results


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Fig. 7.8: Employee turnover (in nos.)

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Canteen 355 373 423 547 652

Medical facilities 3562 3289 4756 5086 5333

Township, Education,

Social, Transport.

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Fig. 7.6: Grievances in nos.

Bipartite fora

No. of meetings

Scheduled Held

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(07-08)

Plant council 04 09 *01

Employee representatives 28 70 49

Medical advisory com. 02 01 *

PF Trust com. Need based 04 03

Grievance com. Need based 03 *

Canteen mgmt. com. 04 01 *

Total 38 107

Fig. 7.10: Bipartite fora

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Fig 7.9: Welfare Expenditure (Rs./Employee/month)

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Grievances: A structured procedure exists for receipt and disposal of grievances. The number of grievances in terms of numbers per employee is quite insignificant. A major feature of this system has been hundred percent redressal of grievances raised and the nature of grievances relate to very few areas such as re-designation and promotion which are governed by well defined norms. Accident levels: There has been no fatal incident in the last five years and there is a continuous decline in no. of reportable accidents (Fig. 7.7). Overall there is increased awareness and involvement of people in safety related issues through health and safety awareness programmes, periodic safety audits by respective departments, quarterly audits by safety department and planned training on safety related aspects (Cr. 3e). Employee turnover: The negligible number of employees (Fig 7.8) resigning from BHEL, Bhopal indicates excellent level of people satisfaction (Cr. 7a) and the care of employees taken by the organisation. The exit interviews indicate that in most of the cases, the individuals have left the organisation on personal grounds. Even though a few more employees have resigned in recent years but it is not an area of concern as the percentage of employee resigned is still negligible and the skill is retained.

In 2007 BHEL introduced the re-employment scheme for those of its executives who resigned from BHEL. This was done in view of the requests made by many ex-employees to join back the BHEL fold. The Scheme found a big success with more than 100 ex-employees applying to join BHEL again. The applications are being processed and individuals are being invited for interview. These applicants included employees at ET level who had resigned very recently and employees who had resigned 10-12 years back. This demonstrates their affinity towards BHEL. Expenditure on welfare:

Besides pay and perks, BHEL, Bhopal extends various other benefits and incentives to its employees such as crèche, LTC, Group insurance, Interest subsidies (housing and vehicle), Holiday Homes etc. The data on welfare expenditure indicates management’s approach towards employees welfare(Fig.7.9). The expenditure on welfare measures is a benchmark as compared to other units (Fig. 8.4). Bipartite Fora:

Regular structured meetings are organized with various employee representatives and associations e.g. 22 shop councils from various departments meet monthly to discuss and resolve the quality, productivity & safety issues. Data on bipartite fora for year 2006-07 is given (Fig. 7.10). *Presently there is hold on conduct of structured meetings as the issue of representation of employee representation is sub-judice. However

People Results


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Fig. 7.13a PP Payments

☺

Level 2006 2007

Workers Supervisors Executives

215 74 03

430 120 175

Fig 7.11 Recruitment

0

50

100

150

200

250

300

Worker 49 23 86 16

Supervisor 13 14 48 7

Executive 68 67 132 68

Total 130 104 266 91

2005-06 2006-07 2007-0808-09 (till

June'08)

Fig. 7.12. Job rotation (Nos.)

☺

unstructured meetings are being held with the employee representatives. More than 400 unstructured interaction/meetings were held with employee representatives. 49 structured meetings were held with the employee representatives on issues of PP/SIP/ selection of New Year gift, uniform items, sharing of performance results. Recruitment trends: Induction has been done at all levels during last two years as per HR plans. The trends are illustrated in Fig 7.11 Strikes: The participative management approach has enabled healthier industrial relations and not even a single man day has been lost (due to strike) during last 20 years. Job Rotation: Keeping in mind the organisational needs and orientation and expectations of employees, job rotation is used as a developmental tool. Data on job rotation indicates unit’s approach towards employee development. (Fig 7.12) Employee productivity and accuracy of personnel administration:

Value added per employee, a measure of employee productivity; indicate an increasing trend over the years (Fig. 9.22). This has been possible due to prudent HR policies and financial strategies.

HR processes and data are online thus enabling Issue of circulars, promotion orders, processing and disbursement of personnel payments/ loans/ advances etc. on the stipulated day/ date. Modules of SAP HR relating to various HR processes have been implemented and the processes having a pay roll interface are under implementation.

Employee Care:

Many new benefits and incentive schemes have been introduced for the welfare of not only serving but retired employees as well (Cr. 3e). Data on PP and SIP payments shows that variable component of package is being increased and is made differential to meet the expectations of various cadres of employees. (Fig. 7.13a & 7.13b) All perks and incentive related issues of retired employees are addressed at single window cell. Life long free medical facility is provided to retired employees along with their spouses on nominal charges. This year an old age home Änandam” has been established for retired employees. Increase in welfare expenditure and improvement in employee satisfaction over the years are some of the indicators of employee care. The employee care issues are regularly reviewed with employees’ representatives both at Corporate and Unit level resulting into new/revised employee welfare measures for eg. the amount of group insurance has been revised upwards by 20 times without any change in employee part of premium.




Society Results


Shri S.N. Dash, Secretary, Ministry of Heavy Industries, GOI –„BHEL is capable enough to meet the ambitious power generation programme of the Govt. of India during present and coming five years plans. Country is proud of Navratna company BHEL which has played a crucial role in the development and growth of the country. People in the country have high expectations from BHEL and expert team of BHEL would definitely meet people‟s expectations‟

Shri Santosh Mohan Dev on the occasion of Golden jubilee of the unit said that BHEL is a national treasure and a jewel in the crown of DHI. BHEL has paved the way for establishment of a modern electro- technical Industry in the country. Setting up of this mother plant at Bhopal showed the path towards developing an integrated heavy electrical equipment capability, which very few countries in the world possess.

Smt. Kanti Singh, Hon Minister of State for Heavy Industries, GOI, ” BHEL is a role model for other PSUs.” Hon. Labour Minister of M.P., Shri Diwan Chandra Bhan Singh-“BHEL efforts towards environment, safety and occupational health is a model

for industries”.

Area of Impact Average Merit Score (Max.-10)

02-03 03-04 05-06 07-08

Performance as a responsible corporate citizen

7.36 8.77 8.82 8.62

Involvement in the community

6.98 8.63 8.34 8.56

Effect of operations on environment and society

7.15 8.57 8.32 8.58

Preservation and sustainability of resources

8.08 9.03 8.66 8.61

Accolades and awards 8.57 8.97 9.16 8.84

Average Index 7.43 8.59 8.66 8.60

Target 8.5 8.5 8.5

Fig. 8.1: Results of Society Perception Survey

Area of Impact Index

Satisfied with time spent with Family 87.00

Free from Mental Stress 76.70

Satisfied with the Salary 86.00

Satisfaction with Bonus 82.10

Satisfied with Promotion 76.70

Satisfied with Career Development 62.40

Satisfaction with Medical Facilities 73.00

Respectability with Society while working with BHEL 93.50

Average Index (Out of 100) 79.68

Fig. 8.2: Results of Perception Survey of Family

Members of Employees of BHEL, BHOPAL

8. SOCIETY RESULTS

8a. Perception measures:

BHEL, Bhopal is committed to CSR and has discharged its social responsibility as a worthy corporate citizen since its inception. This is evident from the observations, statements and the remarks of various eminent social personalities and the reports and articles as they appear in media-both print and electronic.

Society survey: Structured surveys are carried out every alternate year to capture the perception of society. It is also obtained through interaction with officials and through press releases in local press.

Structured society survey (Fig. 8.1) helps the unit to understand the expectations of society, impact of operations of BHEL, Bhopal on community and the impact of efforts made by the unit for larger socio-economic causes. Formal society perception survey is conducted regularly. The questionnaire contains 41 questions on 5 important areas of impact. The survey covers respondents from various walks of life, viz. government officials, principals of schools and colleges, office bearers of cultural associations, officials of professional bodies, gram panchayats etc. The surveys were conducted annually till 2003-04. The frequency was reviewed subsequently and thereafter it was decided to conduct the surveys once in two years. The Average Merit Score is above the targeted level of 8.5 since 2003-04 which indicates very high satisfaction levels. Many suggestions were received during capturing of perception and have been implemented (Fig. 8.3). The unit spends highest amount towards social welfare as compared to other sister units.

Also with a view to capture perception of family members of employees of BHEL, Bhopal living in the township, a survey was conducted in 2005 by M G School of Communication Management, New Delhi in which 774 persons responded. The results indicate very good level of satisfaction (Fig. 8.2).

Right to Information Act: The organization is committed to promote transparency and under Right to Information Act, a CPIO has been appointed to deal with the information requested by general public. More than 250 cases have been received since 2005-06 and Information in all cases has been provided within 30 days.

Society Results


Fig. 8.3: Suggestions implemented as sequel to surveys

Setting up of Anandam- an old age home for senior citizens. Re-metalling of roads Waste water treatment through root zone Check dams for water conservation Mass Plantation Drives to maintain the greenery. Health Related Awareness Programmes. Provision of allotment of community hall and gardens to general public for marriage, picnic, party etc. Opening up of Kasturba hospital for general public-as there are no govt. hospitals in the area. Shifting of slums located near hazardous Gas Plant area, 1250 shanties located near Gas Plant area have been shifted to Bag Sevania

and Shiv Nagar Locality and their complete rehabilitation taken care of.

Fig. 8.5: Charity, Welfare, Education, Training and Leisure

Support for charity, welfare, Education, Training and Leisure: Loomba Trust Scholarship scheme where by 100 students of widows were provided scholarship worth Rs 500 P.M. Specialized training imparted to unemployed youth in the fields of Tie & Die (women) and NDT (employee‟s wards), Jardoji (women),

Beautician‟s course (women) etc. to promote self employment. BHECNIS arranges lectures by eminent personalities every year of the interest to society e.g. lectures delivered by Swami Sukhbodhanand on

Stress Management and Mr. Rajendra Singh (Magsaysay award winner) on conservation of water. BHEL has provided land for rehabilitation of 1250 shanties with water, sewage system & constructed roads. Sports arena of 64.62 Acres with flood lights and well equipped athletic track and provisions for Indoor and Outdoor games such as

Badminton, Tennis, Squash, Hockey, Football, Cricket, Basketball and Golf etc. National Billiards and Snooker Selection Tournament for Asian Games 2006 held at BHEL Senior Club in March‟06. Melas are organised every year. Working models/ exhibitions depicting contribution of BHEL to the society & nation. Adoption of 5 villages (Padaria, Kolua, Adampur, Khajuri and Kanha-Saiyya) under PM‟s 20 point programme. Opening up of library in Padaria

Village School in 2007. Tube-wells in adopted villages. Educational Tour and dress to students of adopted villages. Provision of funds for maintenance of working women‟s hostel ( a joint venture of BHEL and MP govt.), various centres run by „HELPING

HANDS‟, welfare wing of BHEL ladies club, such as Masala Papad Kendra, Chapati Kendra, BLEW Computer centre etc. BHEL, Bhopal purchases greeting cards from charitable institutions such as CRY (Child Relief and You), UNICEF, WWF and Helping Hands

(Sapna Special school for the welfare of the children) etc.

The expenditure on purchase of greeting cards

Year 2003-04 2004-05 2005-06 2006-07 2007-08

Rupees 98,000 98,000 1,13,000 1,15,000 1.16,000

Units 03-04 04-05 05-06 06-07

BHEL - Bhopal 5579 5557 7486 8754

BHEL - Trichy 5524 3911 4424 5537

BHEL - Hyderabad 4028 3877 4936 5346

BHEL - Hardwar 3779 3923 4955 6064

Fig. 8.4: Expenditure on Welfare measures (in Rs. Lacs)

8b. Performance Indicators:

BHEL, Bhopal has taken several initiatives in adopted villages under social welfare under CSR (library, scholarships, educational tours, uniform for students, tube-wells, furniture, medical camps, vocational courses and repair of schools in schools of adopted villages) and Environmental Improvement Projects inside and around the factory (rain water harvesting, water conservation, energy savings systems, resource conservation, wireless fire protection warning system and massive tree plantation) . There is provision of spending 0.2% of PAT on CSR initiatives. BHEL, Bhopal incurs substantially more expenditure on welfare measures as compared to other major sister units (Fig 8.4). The same is also increasing over the years. In 2007-2008, there were more than 1000 press-releases related to the unit in all the leading newspapers (more than 15 newspapers) published in this region, which indicates a positive impact of BHEL, Bhopal in and around the township.

The unit follows all statutory and regulatory requirements of central, state and local bodies. There is not even a single case of violation with respect to certification, clearance, import, export etc. The measures taken by BHEL, Bhopal for improving the satisfaction of the society are as follows (Fig 8.5, 8.6, 8.7a).

Society Results


Parameters

Ambient Air Monitoring (µg/M3) Stack Monitoring

(mg/NM3)

Permi-ssible

Ach-06-07

Ach- 07-08

Permi-ssible

Ach-06-07

Ach- 07-08

Suspended Particulate Matter (SPM)

500 155 – 315 150 – 310 150 95 – 132 96 – 131

Respirable Suspended Particulate Matter

150 55 – 95 52 – 97 NA NA NA

Sulphur Dioxide 120 16 – 22 18 – 23 120 48 – 68 48 – 68

Oxides of Nitrogen 120 10 – 20 11– 21 120 56 – 65 58 – 67

Fig. 8.7b: Status of Air Pollution (Stack & Ambient air monitoring) -2008

Fig. 8.6: Medical and Welfare

Support for Medical and Welfare:

BHEL‟s Kasturba Hospital is the most reputed hospital of M.P. Some of the actions planned as sequel to survey conducted and feedback obtained, have already been completed viz. outsourcing of sanitation function has resulted in perceptible change. More new deluxe wards and new Operation Theatre have been added. New Dialysis facility has been added. Setting up of Sound proof Audiometry lab. New equipments / machines like C-Arm Image Intensifier, Electrolyte analyser, auto clave, Colour Doppler, Blood Collection Monitor etc. have been installed and used.

Setting up of YOGA Research Centre and study of effect of YOGA on prevention and cure of diseases. On 25th April‟08, research study results on effects of Yoga on Asthma, Hypertension and Diabetes were shared with general public.

HE Yoga Mitra Mandal imparts Yoga training through out the year and arranges special training programmes. Release of „HIV AIDs Policy‟ after due deliberations in workshop and Awareness Programmes. An intranet site „Health care On-line‟ provides valuable information about common diseases, status of critically ill patients and has notable

feature of ‟Ask the Expert‟. Kasturba Hospital organises various health clinics in collaboration with external agencies such as IMA, Indian Red Cross Society, WHO,

UNICEF, FPAI etc. e.g. Health camps are organised regularly at village Bhojpur, Bagh Mughalia, Narela Shankari etc where patients are examined and treated. Special camps on specific days like Tuberculosis day, Leprosy day, handicap day, WHO day, Blood Donation day, AIDS day etc. are also organised. CME Programmes are organised in which in-house and guest speakers gave lectures. Health awareness programmes on various topics such as „Diabetic Foot,‟, „Nutrition in pregnancy‟, „Epilepsy‟, „Aljimeiers Disease‟, AIDS, „Ergonomics & Musculoskeletal Disorders‟, „Breast Feeding‟,‟ Hazards of Tobacco use‟, „Early Detection and Prevention of cancer‟, „ Heart Attack Prevention‟ etc were organised this year which were open for public and were attended by people from all walks of life.

Immunisation and vaccinations for Pulse Polio, Typhoid, Cholera, Tetanus etc. to non-entitled population is also carried out In school health programme, nearly 40,000 children of 42 schools have been examined for various infections, vision etc. Plastic and Laparoscopic surgery has been started.

Fig. 8.7a: Environment, Ecology and Safety

Environment, Ecology and Safety:

Manufacturing processes in BHEL, Bhopal and its products and services are non polluting. BHEL, Bhopal has been accredited to ISO 9001, ISO14001 and OHSAS 18001. Entire factory area has been declared as no smoking zone. Helmets are made compulsory for every person driving two wheeler in factory area. For water harvesting and conservation, 9 check-dams have been built on nearly 200 acres of area. Waste water treatment through root zone. Renovation of Buildings, parking area, public utilities. BHEL has joined „Global Compact‟ initiated by United Nations and has committed to observe its principles. Use of plastic containers for transportation of specific materials such as coils, instruments etc. All waste including chemical waste is treated before release, e.g. cyanide salt is neutralised before disposal. A plant has been established for

treating used coolant which can again be recycled. Township has two sewage treatment plants of 2.0 and 0.5 MGD capacity installed at cost of Rs 160 lakhs. Bio-gas produced in sewage treatment plants is used in Chapati kendra and hospital and water from these plants is used for watering the

parks and plants. The leftover is used as manure by horticulture department. Plantation of 782 acres with nine lakh trees including more than 75,500 fruit bearing trees in township. Executive Director led the plantation

drive and employees, school children, unions and associations voluntarily planted more than 50000 saplings in last three years. 14 beautiful parks are a matter of pride for BHEL Bhopal. National safety day and Road safety week are celebrated every year to create awareness on related issues. ED, BHEL, Bhopal is the chairman of M.P. Chapter of National safety council.

A Children traffic Park has been set up in township.

For environmental monitoring, Stack and Ambient air data are monitored regularly in every 3 months and are much below the permissible limits (Fig. 8.7b). BHEL Bhopal’s contribution towards local economy and for conservation of natural resources is given in Fig 8.8 & Fig 8.9 respectively.

Society Results


Fig. 8.10: Accolades and awards

2007-08: National Level „First Prize‟ to BHEL Bhopal by ICWAI for „Excellence in Cost Management‟ in the Manufacturing Sector (above 1000 Cr

Turnover) category. The unit won CII‟s „Commendation Certificate for Significant Achievement‟. Shri Jitendra Singh Artisan of SCR Division was conferred Class-B Vishwakarma Rashtriya Puraskar -2006 for his suggestion Shri A. Sinha of FYM and Shri D.C. Patnayak of Medical department have been conferred Hindi Sevi Samman by Govt. of M.P. Shri Haridas Mistry of Hydro received Úttam Shramik Puraskar‟‟, Padmashri B.L. Chouksey of BEX received „Shramik Sahitya‟ and Shri S.

Sonepure of P & PR received „Shramik Sahitya‟ award of M.P Shram Kalyan Mandal. Mr. Sachin Bhartiya, of FBM was conferred prestigious „Young Technologist Award 2007‟ at the International Welding Symposium -2008

held at Pragati Maidan, New Delhi . 2006-07: Engineering Export Promotion Council (EEPC)‟s Top Export Award to BHEL for the seventeenth year in succession, for outstanding export

performance. The unit won CII‟s „Commendation Certificate for Significant Achievement‟. Business Standard‟s „Star Public Sector Company Award - 2006‟ given by Planning Commission Chairman to CMD, BHEL for exceptional

high growth performance. Second best award to BHEL Enterprise for Women Development Activities by WIPS under the aegis of SCOPE. First prize in Essay contest -2007 organised by INSSAN -NIC to Shri R.K. Tripathi. Second prize on paper presented on „Winning strategy through harnessing employer creativity‟ organised by INSSAN to Dr. Sarla menon.

2005-06: „Udyog Ratna Award‟ to Shri P.T. Deo, ED- BHEL, Bhopal from Hon. Chief Minister of M.P. „National Award for Best Disabled Employee 2005‟ to Shri R.C. Parakh by hon‟ble President of India. „Uttam Shramik Award‟ to Shri V.K. Pagare. „National Udyog Award‟ to Shri M.M. Khare. Business Today magazine listed BHEL as 6th in top 20 companies to Watch based on performance and as most valuable companies at

National level.

2004-05: „Padma Shree‟ to Shri B.L. Choksey by hon‟ble President of India. The unit won CII‟s „Commendation Certificate for Significant Achievement‟. Prime Minster‟s „Shram Veer Award‟ to Shri B.L. Dhruv and Shri S.K. Soni. BHEL-Bhopal has been awarded second prize for promotion of suggestion scheme by INSAAN.

Accolades and awards:

BHEL, Bhopal has been receiving various accolades and awards every year from various outside organisations. Employees of BHEL, Bhopal have also been winning various awards from time to time. Some of the major awards received are as given (Fig. 8.10). The unit organises district, state and national level sports competitions.

Fig. 8.9: Conservation of Natural Resources

Conservation of Natural resources and Energy conservation:

8 MGD of water is sourced from recycling process. Modification and relining of boilers. Use of Solar water heating system in canteens, hospital and guest house. To save on cost of electrical energy, transparent sheets on roofs and side walls of manufacturing blocks and stores have been used. Modification in gas plant for efficient power distribution system Energy efficient CFL street lights

Fig. 8.8: Contribution towards Local Economy

Contribution towards local employment and local economy:

BHEL, Bhopal Supports the local economy by placing orders worth Rs. 200 crores on 375 industries in and around Bhopal. These industries directly employ around 6000 people.

Maintains 1396 shops spread over 2 Main shopping centres and 14 sector-wise shopping centres. Provided pucca Haat markets in all 4 neighbourhoods and maintains 166.9 km of asphalted roads and 12.9 km of dual carriage roads. BHE Credit and Thrift Cooperative society has set up showrooms to offer certain items to the public at marginal profit. Provided land and/ or building to 9 branches of different banks and 6 P&T offices.




Key Performance Results


1000

2000

3000

4000

Projection(SP) 1512 1679 1893 2100 2750 3500

Target 1460 1613 1956 2284 2750 3303

Act 1452 1535 1840 2296 2804

03-04 04-05 05-06 06-07 07-08 08-09

Achievement as % 96 91 97 109 102 of Projection (SP)

Fig. 9.2a: Total Turnover (Rs. Crores)

Year CGL ABB Alstom BHEL Corp.

BHEL Bhopal

2003 4.5 -3.7 -9.5 11.7 9.0

2004 5.8 1.3 -4.8 15.3 10.2

2005 7.1 5.4 5.8 17.2 12.9

2006 8.4 7.9 4.9 19.8 17.9

2007 5.26 7.7 9 20.3 17.95

Fig. 9.1: Profit / Sales in %

Sl. No.

Parameters Projections 06-07 (SP)

Actual 06-07

Target 11-12

1 Turnover (Rs. Crores)

2100 2296 5700

2 CAGR % (at base of 02-03)

11.6 14.2 19.6

3 ROCE % (PBT/Cap Employed)

40.5 44.0 59.3

4 Direct Material as % of GTO-ED

47.5 51.2 52.40

5 VA as % GTO-ED 49.5 46.0 45.1

Fig. 9.2c: Financial Parameters Projections (SP) vs. Actual & Targets and Projections 2011-12

7 7 11 10 1417 19 18 16

2120 22 23 22

26

56 52 48 5239

0

20

40

60

80

100

2003-04 2004-05 2005-06 2006-07 2007-08

%

Q1 Q2 Q3 Q4

Quarter 03-04 04-05 05-06 06-07 07-08

Q1 102 103 196 234 391

Q2 246 297 334 369 575

Q3 297 342 425 504 737

Q4 807 793 885 1189 1105

Fig. 9.2b: Quarter wise Turnover (% and Rs. Crores)

9. KEY PERFORMANCE RESULTS

9a. Key performance outcomes:

Financial outcomes: DWM, a role model initiative, facilitated more than 20% growth on all important financial and R&D related parameters in 2007-08. The unit has entered into new business of BOP (Balance of Plant) to meet targeted CAGR of 20%. The BOP business has increased from Rs. 5 Cr. in 2006-07 to 93 Cr. in 2007-08 and target has been set to achieve 140 Cr. in 2008-09.

A meaningful and logical comparison of financial parameters with competitors is not possible as the product profile of BHEL, Bhopal and competitors are not similar e.g. the turnover of ABB from products similar to BHEL corporation is around 61 % of its total turnover. Similarly for Siemens it is 25%, CGL 41%, L&T 85% and Alstom 100%. These ratios will be still less if compared with product range of BHEL, Bhopal products only. However comparison on most important parameter of Profit/ sales ratio with International Power Plant Equipment Manufacturers is illustrated (Fig. 9.1). The data indicates that Bhopal unit is on consistent growth path.

Turnover:

Turnover trend of BHEL Bhopal vis-à-vis projections of Strategic Plan and targets (Fig. 9.2a) clearly indicate the soundness of planning process. The unit has been surpassing SP projections and targets since 2006-07. Uniform production throughout the year was achieved by the implementation of DWM. This has enabled in reduction in last quarter production to 39% from a level of around 50% in earlier years. (Fig 9.2b)

Fig. 9.2c indicates Unit’s achievement at the end of Strategic plan 2002-07 and the targeted growth at the end of next strategic Plan 2007-12. Direct material % has gone up due to unprecedented hike in basic material prices worldwide such as Steel & Copper (Fig 9.31) which constitute approx. 50% of the total materials (Cr. 4b) affecting the value addition. ROCE projections have been exceeded as a result of focus on top line and stretched targets have been set for Turnover and ROCE.

Profit and Gross Margin: The Unit clocked a growth of 25% in PBT (Fig 9.3) over previous year and also exceeded the set targets by 22% in 07-08 as a result of focus on top line growth. The targets of PBT could not be met in the earlier years because of shortfall in turnover due to deferments and slippages of government’s five year plan.



050

100150

Long 39 77 95 94 89 100

Short 23 47 42 52 60 74

03-04 04-05 05-06 06-07 07-08 08-09

Fig. 9.6a: % of Confirmed orders at the time of budget

finalization (Short Cycle / Long Cycle Product)

0

1500

3000

Shareprice-high 686 877 2050 2668 2930

Shareprice-low 251 375 755 1531 1301

03-04 04-05 05-06 06-07 07-08

Fig. 9.7b: Share-price of BHEL (Rs.)

1014

1822

Tar 15.8 17 16.9 16.8 17.68 20.3

Act 15.49 13.3 15.3 19.8 19.65

03-04 04-05 05-06 06-07 07-08 08-09

Fig. 9.4: Gross Margin as % of Turnover

0

5

10

15

Target 11.3 13.2 11.1 7.9 9.77

Actual 7.4 10 10.6 8.4 11.07

03-04 04-05 05-06 06-07 07-08

Fig. 9.5: New Product Turnover as % of Total Turnover

1000

2000

3000

4000

5000

Target 1246 1639 1709 2056 2704 3538

Actual 1272 2472 1522 2947 4521

03-04 04-05 05-06 06-07 07-08 08-09

Fig. 9.6b: Order Receipts (Rs. Crores)

100

250

400

550

700

147 196 355 600 746

03-04 04-05 05-06 06-07 07-08

Fig. 9.7a: Dividends paid (Rs. Crores)

200

300

400

500

216 246 298 359 440

03-04 04-05 05-06 06-07 07-08

Fig. 9.7c: Net worth per share (Rs.)

0

350

700

Target 168 228 276 324 418 608

Actual 131 156 236 410 511

03-04 04-05 05-06 06-07 07-08 08-09

Fig. 9.3: Profit Before Tax (Rs. Crores)

The Gross margin (Fig. 9.4) was marginally impacted due to higher material prices but measures such as competitive buying, DTC and waste reduction (Cr. 4c) since 2006-07 have resulted in surpassing the targets.

New Product Turnover:

The business from new products (Fig. 9.5) has recorded highest ever turnover and has also exceeded the target. In order to increase the business from new products thrust has been given on in- house R&D i.e. Patents, PIRs, collaborative projects (Cr. 4d) and R&D Commercialisation (Cr 4d). The R&D expenditure (Fig. 9.43a) on this account has grown by 106% as compared to last year.

Order Book: The percentage of firm orders (long cycle and short cycle) at the time of budget finalisation each year (Fig. 9.6a) is continuously growing through strategic decisions of competitive and differential pricing and focus on order booking by continuously reducing the delivery cycle (Fig 9.15, Fig. 9.17). Strategic pricing, customer confidence and engineering capability has resulted in excellent order book position (Fig. 9.6b) and order book is full for 2008-09 for long cycle products.

Dividend and Share-price: BHEL is a debt–free company. It believes in sharing its prosperity with its share holders. It has been generous in paying dividends to its shareholders (Fig. 9.7a) and dividend has been increased nearly 500% since 2003-04. The shareholders were rewarded with a 1:1 bonus this year and a dividend of 152.5% was paid on enhanced equity. The share-price and net worth per share show improvement over the years (Fig. 9.7b, Fig. 9.7c).



0.9

1.4

1.9

2.4

BPL 2.02 1.85 1.74 1.64 1.34

HWR 1.24 1.15 1.26 1.13 0.95

HYD 2.2 1.65 1.64 1.37 1.43

TRY 1.1 1.03 1.02 0.97 1.94

03-04 04-05 05-06 06-07 07-08

Fig. 9.8b: Current Ratio

0

50

100

150

200

BPL 78 89 97 90 88

HWR 140 151 155 123 100

HYD 131 133 95 103 131

TRY 75 136 120 120 152

03-04 04-05 05-06 06-07 07-08

Fig. 9.8c: Inventory (No. of Days of Turnover)

BSC Score in %

Hydro EM TPTN TCB SCR Thermal Fdrs Fab. HR Quality WEX MM Unit

2004-05 76 77 79 85 84 77 87 89 83 91 95 85 92

2005-06 97.4 97.8 97.4 98.2 98.1 97.5 97.6 97.4 95.8 96.4 97.4 96.6 95

2006-07 94.8 93 91 94.6 90.2 93.2 94.6 92.8 90.8 93 95.4 90.6 93

2007-08 98 99 98.2 97 98.4 97.4 97.2 97 97 96.8 97 97.2 96.2

Fig. 9.9: Balanced Score Card Scores for last four years

20

25

30

35

40

45

50

55

60

BPL 41.8 38.4 39.6 41.8 41.5

HWR 54.09 46.8 46.3 46.0 44.5

HYD 33.73 39.3 39.3 38.1 38.6

TRY 36.36 33.2 30.5 29.3 43.5

03-04 04-05 05-06 06-07 07-08

Fig. 9.8a: Value added as % of Turnover

0

18

36

54

72

BHEL 72 72 72 71 71

CGL 15 17 16 13 13

ABB 8 9 10 11 11

Others 5 2 2 1 1

03-04 04-05 05-06 06-07 07-08

Fig 9.11: Market share (%) for Electrical Machines

0

10

20

30

40

50

BHEL 44.41 45.5 40.4 46 45

CGL 21.35 11.29 13.59 8 7

ABB 4.32 13.16 13.26 15 13

Telk+Alst+Emco 20.24 16.62 20 22.6 35

03-04 04-05 05-06 06-07 07-08

Fig. 9.10: Market Share (%) for Transformers

Inter unit Comparisons:

The product mix of all units is unique and hence performance comparison is not logical and meaningful. The data and trends on important parameters is shared in MCM for learnings and improvement in relevant processes. Inter unit comparisons are done on important parameters such as value added, current ratio, inventory and direct material consumption. (Fig 9.8a, b, c & 9.29) BHEL Bhopal is on consistent growth path. Inventory is lowest amongst all units.

Non - financial outcomes: Balanced Score Card Scores: Final Score of Balanced Score Card of Unit of all Product and Functional groups is illustrated in Fig. 9.9. In spite of stretched targets, the Unit has consistently scored above 90% in BSC which indicates that the all the groups and the unit are balancing all strategic perspectives. Market share: BHEL Bhopal is leader in Indian market in entire product range as indicated by the data on market share for the major products vis-à-vis competitors (Fig. O-1, Fig. 9.10, Fig. 9.11, Fig. 9.12).



Product Unit/ Nos.

2003-04

(Act)

2004-05

(SP)

2004-05 (Act)

2005-06

(SP)

2005-06 (Act)

2006-07

(SP)

2006-07

(Act)

2007-08

(SP)

2007-08

(Act)

2008-09

(Tar)

2011-12

(SP)

Hydro Turbine

MW 760 750 683 1000 607 978 649 1296 1284 1002 2756

Nos. 12 11 4 12 7 12 12 17 17 24 21

Hydro Generator

MW 955 750 745 1000 547 835 497 887 869 806 2361

Nos. 13 11 10 12 10 12 9 14 12 24 15

Industrial Machines

Nos. 335 550 527 570 605 600 856 1050 970 1150 1300

Large Electrical Machines

Nos. 116 120 138 135 164 150 280 360 333 375 400

Traction Machines

Nos. 1667 2500 2269 2600 2608 2800 2556 2850 2920 3150 2700

Transformer MVA 9252 12000 9366 12000 10672 12500 12672 15102 14049 20134 33100

Switchgear Nos. 2431 3400 3400 3450 4201 3500 3721 4600 4000 3500 5500

Control gear Nos. 410 550 907 550 576 600 601 640 405 350 700

Traction Control gear

Sets 175 180 200 190 276 200 228 231 231 136 300

Rectifier Nos. 602 830 832 840 1160 850 1006 900 1184 1050 1200

Fig. 9.13: Physical Turnover

yearYearYeaYeay 03-04 04-05 05-06 06-07 07-08 08-09

Target 11000 11750 12000 13150 14150 20200

Fabrication Output (M. Tons)

12710 12648 13101 14500 16600 -

Fig. 9.14: Contribution of Fabrication

0

5

10

15

20

25

30

35

BHEL 20 18 22 25

Megawin 9 14 3.8 6

CGL 6 10 13 21

Siemens 9 9 1.2 -

Stelmec 13 9 7.1 18

Areva+Jyoti+ABB 24 14 19 30

04-05 05-06 06-07 07-08

Fig 9.12: Market share (%) –MV Switchgear

Physical turnover (Volumes) There has been substantial growth in achievement in physical terms over the years due to improvement in technology and by strategic initiatives of outsourcing and vendor developments (Fig. 9.13). The actual achievements are in line with SP targets and the gap in Hydro is because of deferment of projects by customers.

The contribution of Fabrication division (Fig 9.14) has enabled timely delivery and achievements of product targets.

Physical turnover alone may not be a right indicator of volumes in case of some of the products as the ratings are site/ customer specific eg. In case of Hydro products the rating may vary from 4MW (Serlui) to 200MW (Koldam) – but the process demands almost same amount of engineering and manufacturing effort in terms of time and labour. Similarly, in case of switchgear, a strategic decision has been taken to concentrate on value addition rather than numbers. Accordingly, orders have been booked for indoor switchgear of higher value rather than higher number of outdoor switchgear with lower value.



68

78

PI tp PO (Tar) 70 75 77 80 80

PI to PO (Act) 72 76 79 80.1 79.4

SRV (Target) 72 74 76 78 80

SRV (Act) 73 78 77.6 78.5 80.8

03-04 04-05 05-06 06-07 07-08

Fig. 9.16: % PI to PO conversion in 75 days & % SRV clearance within 5 days

Year 04-05 05-06 06-07 07-08

With suppliers 5 7 7 6

With customers 4 3 12 25

Fig. 9.21: JIPs (Nos.) with Suppliers and Customers

Deptt. 03-04 04-05 05-06 06-07 07-08

CEE 160 155 150 137 135

AME 27 25 22 20.5 19.4

SWE 37 35 32 29 26

TRE 110 112 106 100 98

HGE 330 297 270 240 230

TME 216 205 185 170 161

Fig. 9.17: Engineering Cycle time (No. of days)

Description 03-04 04-05 05-06 06-07 07-08

Rejection / Rework Cost

178 95 36 27 3

Site Debit 82 106 57 303 106

No charge orders

1005 1511 1013 2227 700

Freight 214 174 140 66 107

Total 1479 1886 1246 2623 916

Fig. 9.18: Rework rejection cost (Rs. Lakhs)

0

1

2

1.02 1.23 0.68 1.14 0.33

03-04 04-05 05-06 06-07 07-08

Fig. 9.19: Rework rejection cost as % of Turnover

2

2.5

3

2.77 2.9 2.8 2.76 2.6

03-04 04-05 05-06 06-07 07-08

Fig. 9.20: % Weld defects

0

3

6

9

12

15

18

21

24

Ind.motors 4 4 4 4 4

Large elect machines 6 6 6 6 6

Transformer ( 400 Kv) 9 9 9 9 9

Transformers (220

KV)

7 7 7 7 7

Traction macines 5 5 5 5 5

Switchgear (VM12

project)

6.5 6 5.5 5.3 5.25

Hydro Turbines

(Small)

12 11.5 11.5 11 10.5

Hydro Turbines (large) 23 22 22 21 20

03-04 04-05 05-06 06-07 07-08

Fig. 9.15: Product Cycle time (No. of months)

9b. Key performance indicators:

Cycle time reduction: Inspite of increase in volumes over the years, product cycle time (Fig. 9.15) has been sustained through continuous reduction in engineering cycle time (Fig. 9.17) and changes in the process of production and material planning (Cr. 4c, Cr. 4e). The use of IT enabled processes in engineering, material, production planning and regular monitoring of operations (Cr. 1d) has further helped in cycle time reduction. PI to PO conversion and SRV clearance process has shown steady improvement (Fig. 9.16) over the years.

Cost of Rework Rejection: Cost of Rework Rejection (Fig. 9.18, Fig. 9.19) has been contained as a result of thrust on quality, improvement in processes and JIPs with customers and suppliers. Percentage weld defects are also within reasonable level of control due to welding automation (Fig. 9.20). In 2007-08, weld automation has increased from 32% to 45% and a target set for 60% for 2008-09.

JIPs: GMs & HODs take up JIPs with Customers and suppliers (Cr. 1c, Cr. 4a, Fig. 9.21) which is also an objective of GMs’ BSC.

Financial: Turnover and Value added per employee Value added per employee and Turnover per employee (Fig. 9.22), has more than doubled in last five years and also targets exceeded as a result of outsourcing of non core activities (Cr. 3a), proactive material management (Fig. 9.29, Fig. 9.30) and prudent financial management (Cr. 4b).



0

50

100

150

200

Target 43 60 69 107 158

Actual 12 9 35 146 190

03-04 04-05 05-06 06-07 07-08

Fig. 9.23: Economic Value Added (Rs Crores)

0

10

20

30

40

50

VA/Emp(target) 7.08 8.7 10.4 12.2 14.52 17.66

VA/Emp(actual) 7.3 7.4 9.4 12.7 15.02

To/Emp(target) 17.13 21.2 25.3 29.5 35.26 42.25

To/Emp(actual) 17.47 19.1 23.8 30.3 36.28

03-04 04-05 05-06 06-07 07-08 08-09

Fig. 9.22: Value added and Turnover per employee (Rs. Lakhs)

0

100

200

Target 118 134 131 134 101 56

Actual 202 173 168 161 131 80

02-03 03-04 04-05 05-06 06-07 07-08

Fig. 9.24: Net Working capital (days of Turnover)

0

10

20

30

Target 26.17 17.2 17.71 13.55 1.59

Actual 16.03 14.4 12.69 8.35

04-05 05-06 06-07 07-08 08-09

Fig. 9.25a: Interest Outflow (Rs. Crores)

0

500

1000

Target 209 284 164 370 556 987

Actual 183 156 97 243 616

03-04 04-05 05-06 06-07 07-08 08-09

Fig. 9.25: Net Cash flow (Rs. Crores)

0

2000

4000

Tar 1516 1709 1953 2476 2881 3698

Act 1418 1581 1868 2337 3025

03-04 04-05 05-06 06-07 07-08 08-09

Fig. 9.26: Cash collection (in Rs. Crores)

50

100

150

200

Target 95 99 97 99 81 74

Actual 171 185 169 160 151

03-04 04-05 05-06 06-07 07-08 08-09

Fig. 9.27a: Collectible Debtors as no. of days of Turnover

Economic Value added: EVA (Fig. 9.23) has been continuously monitored and improved upon and targets exceeded by management of working capital and sundry debtors. In year 07-08 a stretched target was set for EVA and the growth of more than 30% over last year has been achieved.

Working capital: Working capital as number of days of Turnover over the years (Fig. 9.24) has continuously being brought down through reduction in production cycle time, effective material management and production planning. The targets of working capital could not be met due to deferment of some projects by customers resulting in higher WIP.

Net Cash flow, Sundry Debtors and Cash collection: Operational cash surplus is managed through generation of net cash flow (Fig. 9.25) and controlled cash outflow through inventory management (Fig. 9.8c).

Cash collection has been a key process for cost reduction. Aggressive targets for cash collection are set related to turnover targets. Cash collection is focused on present supplies, collectible debtors and deferred debtors. Performance on Cash collection has improved over the years (Fig. 9.26) as a result of improvement in timely supplies, completeness of supply (Cr. 6b), and linkage of dispatches with advances/ LC. Due to prudent financial management (Cr. 4b), interest outflow to corporate office has been reduced over the years (Fig. 9.25a).

A thrust has been given for reduction of debtors which has resulted in reduction of Collectible debtors from 185 days in 04-05 to 151 days (Fig. 9.27a) and deferred debtors from 88 to 78 days (Fig. 9.27b). This enabled a cash surplus of Rs. 657 Crores (Fig. 9.25), which is around 2.5 times compared to last year and highest ever. This has helped in reducing creditors significantly from 82 days in 05-06 to 63 days in 07-08 (Fig. 9.28).



40000

37900

38950

40000

3600033500

31500

2950028500

24000

27000

29000

34000

31500

29500

27000

26200

22000

25000

28000

35000

28500 28000

2300026700

28000

30500

32500

36000

29000

29000

24000

27900

29500

31500

33500

20000

25000

30000

35000

40000

APRIL, 2005 OCT., 2005 JAN., 2006 JUNE'2006 SEP, 2006 APR, 2007 OCT, 2007 FEB, 2008 APR, 2008

< 10 MM 11 TO 20 MM 21 TO 40 MM > 40 MM

LM E R A T E ( US $ / M T ) F R OM D EC .06 T O

A P R .08 ( M AX LM E =8 8 8 4 . 5 0 ON 10 . 0 4 . 0 8 & M I N LM E = 5 2 9 0 . 0 0 ON

0 5 . 0 2 . 0 7 )

6 5 8 7

7 0 6 1

8 0 0 8

7 8 8 7

8 4 3 9

6 9 6 6

8 6 8 5

7 5 1 3

7 6 4 8

7 9 7 3

7 4 7 5

7 6 8 27 7 6 6

6 4 5 2

5 6 7 65 6 6 9

6 6 7 5

4000

4500

5000

5500

6000

6500

7000

7500

8000

8500

9000

DEC

.06

FAB.0

7

APR

.07

JUN.0

7

AUG

.07

OC

T. 07

DEC

.07

FAB' 0

8

APR

'08

Line 1

Fig. 9.31: Steel and Copper material price trend

30

50

70

90

Actual 85 87 88 88 78

03-04 04-05 05-06 06-07 07-08

Fig. 9.27b: Deferred Debtors as no. of days of Turnover

40

45

50

55

60

65

70

Bhopal 50.4 55.3 55 51.9 52.6

Hardwar 41.3 52 48.5 47.4 48.5

Hyderabad 58.82 58 57.1 57.3 60.5

Trichy 54.4 59 68.1 64.0 53.5

03-04 04-05 05-06 06-07 07-08

Fig. 9.29: Direct material consumption as % of GTO (Net of excise)

2

2.5

Target 2.16 2.05 2.12 2.4 2.22 2.18

Actual 2.07 2.35 2.28 2.27 2.33

03-04 04-05 05-06 06-07 07-08 08-09

Fig 9.30: Indirect Material consumption (%of Turnover)

60

70

80

90

82 70 63

05-06 06-07 07-08

Year 05-06 06-07 07-08

Purchases (Rs. Crores)

1165 1311 1656

Creditors (Rs. Crores)

263 251 285

Fig. 9.28: Creditors – Nos. of days of Purchase

Cost Reduction: Cost reduction, a CSF, is managed through cost reduction in Materials (Fig 9.29, Fig 9.30) & Personnel Payment (Fig. 9.38).

Material consumption: The product mix of BHEL Bhopal has a very high material content. Inspite of abnormal hike in prices, (Fig 9.31) the material consumption (Fig. 9.29 & 9.30) has continuously been contained through focussed engineering efforts such as DTC and competitive buying (Cr. 4a, Cr. 4c). Bhopal is operating with least material consumption compared to sister units (Fig. 9.29) except Hardwar Unit, where the product mix is not as broad as of Bhopal. Initiatives have also being taken for containment of Indirect Material Consumption (Fig. 9.30), personnel expenses (Fig 9.38) and power & fuel expenses (Fig 9.37a). Realisation of revenue from Scrap sales (Fig 9.36) and competitive buying (Cr.4b, Fig 9.34) has resulted in further growth in bottom line. Improvement in cash collection process has enabled in reduction in payment time to vendors from 180 days to 90 days which has also enabled vendors to quote competitive prices. Savings through Six Sigma, DTC & LEAN DTC the major cost reduction exercise (Cr.2c, Cr.5b) has been launched with a view to control the material cost and the actual / projected savings are illustrated in Fig. 9.32a. It has started yielding results. Lean has resulted in improving productivity and OTIF (On Time In Full) and reduction in defect rate and Inventory (Fig. 9.32b) and also in controlling cost. Six sigma efforts led to

improvements in processes and savings accrued are indicated in Fig. 9.32c.



Energy Conservation Projects implemented Annual Savings

(Rs. Lakhs)

Replacement of metallic Fan Blades of Man coolers by FRP Blades (200 nos.)

10

Installation of Portable Compressors at point of use (TCB, FBM & FYM)

14

Renovation of old Pumping system for Cooling Water in Compressor Pumps 52 HP to 30 HP (saving of 22 HP).

1.5

Fig. 9.37b: Some examples of Savings through energy conservation projects

Years 03-04 04-05 05-06 06-07 07-08

Scrap Revenue (Rs. Lacs) 1589 2069 2220 3868 3909

Fig. 9.36: Scrap Revenue

10

20

Target 18.5 16.4 15.8 14.2 13.89 13.73

Actual 19.1 18.1 17 15.5 14.41

03-04 04-05 05-06 06-07 07-08 08-09

Fig. 9.38: Personal payments as % of Turnover

150

400

650

900

NM 260 421 763 300 153

03-04 04-05 05-06 06-07 07-08

Fig. 9.33: Non-moving inventory (Rs.Lakhs)

800

3200

5600

8000

1682 1106 1300 1378 8100

03-04 04-05 05-06 06-07 07-08

Fig 9.34: Savings due to competitive buying (Rs Lakhs)

1

1.5

2

1.7 1.25 1.21 1.70 1.65

03-04 04-05 05-06 06-07 07-08

Fig 9.35: No. of rejections over total SRVs (%)

01234

Target 3.38 3.2 3 2.16 2.14

Actual 3.39 3.18 2.43 2.33 2.05

03-04 04-05 05-06 06-07 07-08

Fig.9. 37a: Power fuel expenses (% of Shop Turnover)

Initiatives

Savings (Rs./ Crs.)

Target 07-08

Accrual Target 08-09

DTC- Transformers

8 7.5 9

DTC - EM 8.5 8.65 9.5

DTC -TPTN 1 0.8 3.81

Lean - SCR 5.0 4.5 9

Lean - TPTN 8.62 8.60 9.05

Fig. 9.32a: Savings through DTC and Lean

7.405.90

3.47

0.00

3.00

6.00

9.00

05-06 06-07 07-08

Year 05-06 06-07 07-08

Cumulative savings (Rs. Crores)

3.47 5.90 7.40

Cumulative projects (Nos.)

60 100 130

Fig 9.32c: Savings through Six Sigma (Rs. Crores)

Key Metric

Transportation

Unit Baseline2005-06

Actual 2007-08

Production Vol. Units 1826 2096

OTIF % 21 98

First Pass NCs % 3.2 0.5

Inventory Months 2-2.5 1.2

Key Metric

Switchgears

Unit Baseline2005-06

Actual 2007-08

Lead Time Months 23-24 14

Defects/ Unit Nos. 10.1 5

OTIF % 33 80

Fig. 9.32b: Examples of Lean Metrics

Inventory: The increasing trend in Inventory (Fig. 9.8c) has been arrested and reversed in 06-07 through rigorous monitoring in Inventory review committee meetings (Cr. 4c) chaired by ED and reduction in Non moving inventory (Fig. 9.33). Continuous support provided to suppliers (Cr. 4a) has resulted in control of rejection of items (Fig. 9.35) received on Stores Receipt Vouchers (SRVs) at a reasonable level.

Energy conservation:

Although Energy consumption constitutes a small percentage of turnover even then a focused attention is paid to conservation of energy with a view of cost reduction & environment considerations. Energy conservation projects are identified & implemented (Fig. 9.37b, Cr. 4c).

In spite of steep hike in prices of Power & various fuels, the efforts initiated for energy conservation

have resulted in continuous reduction in power & fuel consumption as % of shop turnover (Fig. 9.37a). Personal Expenses as ratio of Turnover has been continuously reduced (Fig. 9.38) as a



Year 03-04 04-05 05-06 06-07 07-08

Number 25 32 25 30 34

Value (Rs. Crores) 12.6 15.15 6.41 6.16 53.08

Fig. 9.44: PIRs

Year 04-05 05-06 06-07 07-08

Projects 17 621 591 534

Fig. 9.39b: Impress Projects (Nos.)

0

100

200

8 11 31 101 163

03-04 04-05 05-06 06-07 07-08

Fig. 9.40: Capital Expenditure (Rs. Crores)

0

250

500

750

484 498 503 554 594

Fig. 9.41: Fixed assets (Rs. Crores)

0

20

40

60

80

50 52 57 63

04-05 05-06 06-07 07-08

Fig. 9.42: Overall Equipment Effectiveness (%)

0

4000

8000

12000

Target 750 1050 1815 3530 6060 7700

Actual 220 1050 2074 4488 6400

03-04 04-05 05-06 06-07 07-08 08-09

Fig. 9.43a: R & D Expenditure (Rs. lakhs)

0

400

800

Target 160 260 280 350 379 799

Actual 250 422 380 500 443

03-04 04-05 05-06 06-07 07-08 08-09

Fig. 9.43b: R & D Commercialization (Rs Crores)

2000

4000

6000

Target 2200 2400 3600 4700 5943 5960

Actual 2500 3750 4038 5432 5999

03-04 04-05 05-06 06-07 07-08 08-09

Fig. 9.43c: Indigenisation (Rs. lakhs)

Year / savings 03-04 04-05 05-06 06-07 07-08

Suggestions 428 462 402 412 141

Quality Circles 722 698 1138 1245 2200

Fig 9.39a: Suggestions & Quality Circles (Savings in Rs. Lakhs)

result of a strategic decision of reduced intake of employees in proportion to wastages due to natural retirement and further outsourcing of non core activities. However the targets have not been met due to unprecedented rise in inflation with corresponding rise in CPI resulting in higher payments on account of dearness allowances. Productivity and Quality Circle measures: The savings accrued through Suggestions and Quality circles are indicated in Fig. 9.39a. From 05-06 all improvement projects are being registered as Impress projects (Cr. 3c, Fig. 9.39b).

Capital investments: The approach (Cr. 4b, Cr. 4c) of holistic modernisation and

expansion of facilities for capacity enhancement a CSF (Fig. 2.8) has resulted in continuous increase in capital expenditure over the last five years (Fig. 9.40). This has also resulted in improvement

in fixed assets (Fig. 9.41).

Overall Equipment Effectiveness: As a result of various initiatives (Cr. 4c) taken, OEE has improved over the years (Fig. 9.42).

Technology: The focus on in house developments (Cr. 4d) and need for product developments has resulted in increase in number of

Patents, PIRs (Fig. 9.44) and R&D expenditure (Fig 9.43a) which is at an all time high. This thrust has also resulted in increase in R&D commercialisation (Fig. 9.43b) and Indigenisation (Fig 9.43c) and exceeding the targets. Both of these parameters are part of ED’s BSC objectives. A number of new products have been developed and commercialised for customer specific applications. (Cr5c)



Year 04-05 05-06 06-07 07-08 08-09

Target 4 5 10 15 21

Actual 4 6 8 15 -

Fig. 9.45: Patents filed

03-04 04-05 05-06 06-07 07-08

Flash 1451 1533 1825 2286 2808

Actual 1452 1535 1840 2296 2804

Total Turnover (Rs. Crores)

0

0.5

1

0.07 0.13 0.82 0.44 0.1

03-04 04-05 05-06 06-07 07-08

Fig. 9.46: Deviation of Audited from Flash T/O in %

Resources/Year 03-04 04-05 05-06 06-07 07-08

PCs (nos.) 942 1139 1339 2085 2227

Servers(nos.) 17 17 17 19 19

Work Stations (nos.)

7 7 7 17 17

Plotters 17 17 17 28 28

Network

Fiber optic cable (km)

26 26 42 42 46

UTP cable(km) 81 85 95 140 150

Online application (nos.)

86 79 74 112 128

Email users 1500 1550 1600 1857 1900

Internet connection (nos)

394 850 1250 1274 1300

Peak time user 300 350 500 800 850

No.of persons PC/terminal

2.5 2 2 1.2 1.09

Intranet applications

60 67 84 120 137

Fig. 9.48: IT Resources

Telephone Lines Fax Mobile

Internal Direct

Communication facilities in nos.

3000 280 60 1200

Fig 9.47: Communication Facilities

DWM

WO & Shipping list

Pink factory receipt

Packing list

Dispatch advice note

Excise invoice

Commercial invoice

Supplier Bill

Stock Status Inventory

Employee Bio-data

Training Details

Material requisition

Indent

Enquiry

Purchase Order

Store receipt voucher

Pay slip

Fig. 9.49a: IT based Applications

Dept 05-06 06-07 07-08

AME 7000 8800 15220

HGE 21200 37214 35500

TRE 9151 11481 14135

CDE 5424 5112 5136

SWE 21780 23300 15558

CEE 4500 7500 8500

HSE 6500 9200 12000

Fig. 9.49b: AUTOCAD- Drawing generation

Patents: The efforts on R&D (Cr. 4d) and the enabling IPR incentive scheme has enabled the unit to meet the Patents target (Fig. 9.45) which was almost double as compared to last year and stretched targets are set for 2008-09.

Information and knowledge: BHEL Bhopal puts in continuous efforts for availability of timely and accurate information to all stakeholders (Cr.3d, Cr. 4e). One of the examples of availability of timely information is the declaration of financial flash results on the 1st working day of financial year by the Unit head and followed by the Press conference & JPC meeting on the same day. The comparison between Flash results and audited results (Fig. 9.46) is an indicator of the accuracy of the information. The deviation in 05-06 is attributed to the introduction of new accounting standard AS-7. With the better understanding of AS-7 this deviation has been controlled in subsequent years.

Communication Facilities: The unit is continuously upgrading the communication facilities (Cr. 4e, Fig 9.47).

IT- Facilities:

The IT infrastructure and equipment has also been upgraded & modernised regularly (Cr. 4e, Fig. 9.48). Fig. 9.49a indicates generation of various documents through the IT based applications which results in Cycle time reduction. Fig 9.49b indicates department wise year wise drawing generation on AUTOCAD. Some of the new IT initiatives are:

Executive Dash Board System Electronic Fund Transfer System Engineering & Business Server Consolidation IRIS Detection for server room

Centralized Authentication of licences for Engineering Software

Smart Card Door Access 175 persons trained in UG-NX UG-NX projects taken up by HTE, TRE, CDE Turning & Milling operations using UG Completed

Note: Most of the data presented for Cr 6, 7, 9 is segmented. For the parameters which have been presented for unit as a whole the segmented data is available with respective product / function / process owners.

EXECUTIVE SUMMARY Introduction Bharat Heavy Electricals Limited, a Navratna Public Sector Undertaking, is engaged in designing, manufacturing, supply, erection and commissioning of power plant equipment having 14 manufacturing divisions (Units), 4 power sector regions and 18 regional offices in India. Heavy Electricals (India), Limited, Bhopal, established in 1956, was merged with BHEL in 1974. It is one of the 14 manufacturing Units. The unit designs, manufactures and supplies equipment for power, industry and transportation sectors catering to Indian Railways, NTPC, SEBs, NHPC, TATA Steel and Overseas customers. It achieved a turnover of Rs 2296 Crore in '06 - 07. Its main products are: Traction machines -- 23%, Electrical machines -- 17%, Switchgear, Control equipment & Rectifiers -- 17%, Transformers -- 15%, Thermal equipment -- DG sets, BOP, Feeders etc -- 16%, Hydro equipment -- 12%. It has 7000 plus regular employees and 3000 plus contract employees. Corporate supports the units in include the areas of Strategic Planning, Domestic & International Marketing, HR, Finance, Management of Data & Analysis and Technical Know How.

Leadership Top leaders of BHEL at corporate level develop & review the vision, mission and strategic plans once in five years involving the leaders and employees of all the Units / divisions. The current VMV, evolved in 2002 focusing enhancement of stakeholder value and last review was made in 2006. It has translated these into business policy, cascading down further to functional pole star statements and CSFs. The leadership has developed appropriate relationship with the key input providers and long-standing customers with a win - win approach. It also displays a caring and welfare oriented approach to people who are given opportunities to come out with innovative ideas in improving manufacturing capability. The Unit leadership drives a number of change initiatives viz; DTC, Lean, IMPRESS and DWM to further excel in all its operations. It carries out operational reviews through an improved structure viz DWM and ED’s dash board with a view to inculcate result orientation and enhance performance through closer monitoring and control. The Unit leadership promotes a culture of quality & reliability in products & services and manufacturing processes. It maintains relationship with customers through transactional / non-agenda meetings as well as by providing quick service. Although GMs and HODs participate in Inter Unit Functional Heads' Meet, to capture best practices of other Units, it is not evident how the leadership uses such information and data for driving improvement in the unit in an integrated manner. The leadership may like to focus, as a process, on bringing and adopting best practices from sister units, best in class and best in world to enhance agility and competitiveness of the organisation to realise its mission. Also leaders have scope for evaluating and improving their personal leadership behaviour. While change management has addressed enhancing organisational capability and effectiveness along with people performance management system (e-map), it does not appear to address critical processes, related to people competence, training & development and involvement - at every level to enhance people capability. HR change plan addresses only numbers. While focus is seen in technical, manufacturing areas, similar thrust is not strongly visible in nurturing excellence in rest of the organisation.

21 CII-EXIM Bank Award for Business Excellence: Feedback Report 2008

Policy and Strategy Over a period of time, from seventies to date, the strategic planning process of BHEL has been evolved, improved and has matured into a defined process based activity. Policies and Strategies are communicated and cascaded down through Corporate Strategic Plan, Strategic Divisional Plan, Three Year Rolling Plan, Annual Budget and deployed through BSC at Unit, GM & HOD level and finally through individual KRA / e-Map. These are deployed / achieved through a number of key processes and sub processes with appropriate process measures, derived from CSFs and owned by CSF champions. Although excellence in product is a highly focused area and product benchmark data is used in strategic planning (Transformers made by the Unit are perceived as best in the world), process benchmarking needs to be addressed to enable BHEL Bhopal becoming a world class MNC. While needs of various stakeholders are considered during planning process, the same is not apparent for about 2500 vendors having significant roles to play in fructifying strategic plan 2012. The use of data from research & learning activities including foreign visits, product life cycle analysis and core competency of partners is not seen. People The Unit HR plans are developed & cascaded from Corporate Vision, Mission & Values, Corporate HR policy / Personnel Manual, HR Pole Stars etc. Feedback from employees through 3 tier participative management forums is taken for developing HR policies / plans. Improvements have been brought in - based on employee feedback. Competency mapping, related to Technical / Engineering and Management Skills requirements have been done. The Unit has many improvement initiatives for involving employees such as CFTs, Quality circles, Six Sigma teams, self-directed teams for DTC & LEAN, suggestion schemes etc. A process is demonstrated for ensuring employee care & welfare, involvement, providing opportunities for learning & development and for recognising & rewarding individual and team performers to inculcate a culture of excellence. While succession planning is addressed at senior management level, it is not evident at middle management level. It does not appear that effectiveness of a critical process like training & development is measured. Though competency mapping has been done for individuals in management level, it is not evident if gap analysis has been done and the outcome has been acted upon to enhance competence. While employee involvement approaches address the employees at all levels, it does not appear to address contract workmen, numbering more than 3000 and non-involvement may not be conducive to desired human relations and work ambience in the Unit. Although the Unit is certified to OHSAS and lot of awareness programmes are held, it is difficult to assess the effectiveness of such initiatives, as use of PPE appears to be adhoc in various plants of the Unit.

Partnerships and Resources The Unit has developed various strategic alliances, for product and technology development with organizations like Toshiba, Siemens, Strukton Systems, CVRDE etc. It has also JVs with customers like NTPC, NPCIL, and Railways etc. The Unit holds product wise supplier meets. It also has some JIPs with vendors to develop components like commutator & impeller and for packaging improvement. The Unit has established financial a management process. Various revenue and cost budgets are prepared specifying the cash flow and working capital requirements. Financial

CII-EXIM Bank Award for Business Excellence: Feedback Report 2008

22

analysis is carried out for all new investments proposals in terms of NPV & IRR. The financial management practices of the Unit support growth, profitability, cost competitiveness and capacity & capability enhancement. These are aligned with company P&S and are reviewed at Unit and corporate levels in important meetings like ED's cash review meetings, MCM, capital budget meetings, Finance head meetings. A five year engineering road map with year wise milestone has been prepared by respective product managers and approved by ED. Technology is being continuously improved in association with Corp R&D, Research & Technical Institutes and learning through customer feedbacks. The Unit also improves its processes using Information and Communication technology (ICT) and all major processes are IT enabled. IT enabled automation is also used in manufacturing (CNC machines, cranes) as well as in design. Even though the Unit has vendor-rating system, JIPs with vendors and organises vendor meets, there is little evidence of recognition by any form of these important partners. It is not clear how the Unit provides financial resources towards investing into non tangible assets, like Brand Building and Intellectual Properties. Though implementation of 5S is in the plan, it is still in the very early stage of implementation. While international technology leaders appear set to become competitors and may be reluctant in providing technology know how, the Unit’s approach towards strategic / business & technology sharing / tie up along with focus on more self reliance is in a very initial stage. Processes Operational processes are designed to fulfill QCD requirement of customer and these are documented in Quality Manual along with the KPI details. Support processes are documented in the respective manuals such as HR manual. Various process improvement strategies are used to achieve breakthroughs and incremental improvement. IMPRESS is the common umbrella used for various improvement initiatives such as QIPs, PIPs, JIPs, and TDP etc. DTC is one of the key tools used for breakthrough changes in existing designs, materials and processes. Various tools / initiatives such as DWM, Six sigmas, CRISP boards are used to monitor and control the process variations to reduce the defects and rework. On site fabrication facilities are also extended to customers as per requirement. The Unit has established many practices to enhance customer relationships such as pre and post contract reviews, Pre award meetings, Contract execution review, Routine inspection, Complaints resolution and Customer trainings. The Unit has identified nine processes viz. from Planning to Lean Management as Key Processes for the year 2007 - '08. It has also identified nine other processes viz. as Business Processes. Tender Processing, Manufacturing, Inspection and Testing to Services as Business Processes. At the same time, Marketing & Sales, Project Management and Materials Management as Business Processes. Hence it is not clear what framework, of key processes, has been identified, designed and communicated to all concerned to deliver its policy & strategy and enable its people to have uniform understanding across the organisation. While targets / stretch targets are set in most processes, the Unit may like to evolve a robust target setting process, taking into consideration customer / next process requirement, past performance, process capability, benchmark and integrated with MIS for review, enabling the Unit towards becoming a world class MNC. Customer Results The Unit has received customer accolades and the customer satisfaction index is improving, compared to own performance, over the years for most of the attributes. Product wise CSI has also


23

been improving and is more than the target set. Customer accolades appreciate import substitution efforts, improvement in supply position and customer training provided. The failure rate of Generator Transformers in operation at customer end has come down to zero over the years and BHEL Bhopal has attained ‘best in class’ benchmark in Test Acceptance rates. The results of perception measures related to image in terms of flexibility, transparency, proactive behavior and responsiveness are captured in survey are lower than the competition (2007). Cause and Effect analysis was not available. Though delivery performance trend is showing improvement, it is still lower vis-à-vis the competition. It is not evident what actions have been taken. No data has been provided on Overseas Customer Satisfaction. People Results Feedback results through employee perception survey show that Average Merit Score is showing improving trend for workmen. Overall AMS for various attributes have improved over the years. The score on Leadership Index conducted during 2007 has been higher than the previous survey of 2005. The training man-days / employee have been improving over the years. The investment in training has been increasing and number of employee sent abroad for training has also been going up. Employees have been awarded the national recognition on individual basis and the number of persons awarded as Swasth Karamchari has been going up. The employee involvement in suggestion schemes, Quality Circles and PIPs is increasing over the years. Quality Circles have received accolades in various competitions. Employee Perception Survey results, pertaining to empowerment, satisfaction scores related to employment conditions, facilities and services, health and safety conditions, pay and benefits, peer relationships, management of change, job security, are not presented. The satisfaction index of supervisors and executives has marginally dropped in last three surveys, for all attributes except training and retraining. No comparative data is available vis-à-vis group, domestic industry benchmark. The results for indicators related to competency requirement vs. available, success rate of training, measurement of training effectiveness, communication effectiveness, and speed of response to enquiries are not tracked to facilitate comprehensive evaluation of different HR practices/processes. Society Results The positive remarks made by the eminent social personalities provide perception about the company's image towards social responsibilities. Results of society perception survey show improvement in overall score. There has been continuous increase in expenditure on welfare measures by BHEL Bhopal, which is the highest in comparison to other units. BHEL provides support for welfare education, training & leisure, medical and welfare to the community. Besides social welfare activities, Bhopal unit supports society by carrying out activities like health clinics, health camps, and special camps on days like TB Day. WHO day, Blood donation day etc. The unit also conducts various health awareness programmes on Diabetes, Epilepsy, Alzimers, AIDS, Nutrition, Tobacco hazards -- etc. BHEL Bhopal has taken many initiatives towards improving the Environment, Ecology and safety. Air and Stack Emission have been kept much below the statutory norms. While the unit has many societal approaches an initiatives this have not been compared with any other organization’s approaches for identifying opportunities to improve.


24

Key Performance Results There are positive trends in the financial indicators such as Profit / Sales, Turnover, Quarterly turnover, PBT, Gross Margin as % of Turnover, Current Ratio. The value added as % of TO have been improving over the years, being 2nd best in BHEL group. New product TO as % of total TO is highest in last 5 years. The inventory has been coming down in number of days of TO and is lowest among BHEL Units. There are improving trends in case of reduction in cycle time for Engg. Product cycle time, rework, % weld defects. There has been improvement in EVA, Value added and turnover / employee, net cash flow and cash collection. The working capital in days of turnover has come down and achieved lower interest and drop in debtors. Cost reduction has been achieved through cost reduction in material and personnel payments. There had been reduction in energy consumption, Power, Fuel expenses. Savings through suggestions and Quality circle have been improving. No result data have been provided on process performance, time to market, and success rate related to marketing efforts. No marketing results data related to export is available. While the Unit has number of product segments as well as market segments, segmented results are not provided. No comparison is done with the competitors for many performance results. No result data is available on performance of various Key and Support Processes in terms of process indicators. No targets, benchmarks and competitive data have been given in the results for most of the parameters. Conclusion BHEL Bhopal, as it has been said, is changing from a slow moving stoic elephant to an agile leopard. It is transcending from product excellence to organisational excellence. The Unit leadership is driving this journey of changing mindset, ably supported by Business Excellence Group. The HR strategy and approaches need to be redefined to enhance organisational capability through people capability. Appropriate HR approaches can facilitate excellence touching hearts of the people and in turn bring agility in the organisation, hand in hand with Business Excellence Group. Process benchmarking with best in class needs to be institutionalised to hasten the transformation process. Senior Assessor Mr Nilay Kumar Ghosh Assessors Mr A S Kulkarni Mr Manoj Yadav Mr P N Gupta Mr S K Srivastava Mr Sivaprakasam


25

THE SCORE SHEET

% Score Criterion

0-10 11-20, 21-30 31-40 41-50 51-60 61-70 71-80 81-90 91-100

Leadership

*

Policy & Strategy

*

People Management

*

Partnership & Resources

*

Processes

*

Customer Results

*

People Results

*

Society Results

*


*

Legend : Score awarded to your company Highest score awarded to any applicant so far *

Overall Score:

Scor

e Ra

nge

<300

CII-EXIM Bank Aw

301-

349

350-

399

400-

449

450-

499

500-

549

550-

599

600-

649

650-

699

700-

749

750-

799

800-

849

850-

899

900-

949

950-

1000

*

ard for Business Excellence: Feedback Report 2008

26

CII-EXIM Bank Award for Business Excellence: Feedback Report 2008 1

CII–EXIM BANK AWARD FOR BUSINESS EXCELLENCE 2008

INTRODUCTION

It has been a privilege to be given an opportunity to assess your organisation for the Award in the year 2008. Your application document was assigned to a team of trained assessors who worked very hard to evaluate the document fairly and objectively. One of the benefits of applying for the CII-EXIM Bank Award for Business Excellence is the feedback report all applicants receive on the findings of the team of assessors. The purpose of the feedback is to bring out the main strengths and the opportunities for improvement along with the score given to your organisation – as perceived by the team of assessors. The feedback report is aimed primarily, to provide inputs for improvements and we hope you will find the comments made are constructive and in the spirit of continuous improvement which is at the core of Excellence. The feedback report is divided into four sections. The first section is a brief overview of the process followed for assessing all the applications for the year 2008 Award. This is to facilitate you to understand the work on your application leading up to the feedback report. The second section describes how the feedback report may be used for reviewing and developing improvement strategy and action plan for the company. The third section gives an executive summary of assessors’ findings on the strengths and opportunities for improvement against the award criteria for the organisation as a whole, the score achieved in bands of 10 percentage points for each of the nine criteria and the overall score achieved in intervals of 50 points on 0-1000 scale. The highest score awarded to any applicant of CII-EXIM Bank Award for Business Excellence, so far is also given as a benchmark.

The fourth section describes in detail the Strengths and Opportunities for Improvement in respect of each of the thirty-two sub-criteria of the Business Excellence Model, which can form a basis for developing an organisation’s strategy for improvement. The management team may use this feedback report for prioritising improvement actions in their organization towards achieving Business Excellence. A repeat of assessment exercise after about a year helps in measuring the progress on improvement actions and also to review the strategy for improvement.

CII-EXIM Bank Award for Business Excellence: Feedback Report 2008 2CII-EXIM Bank Award for Business Excellence: Feedback Report 2008 2


SECTION 1

OVERVIEW OF THE ASSESSMENT PROCESS


OVERVIEW OF THE ASSESSMENT PROCESS

Your application has been assessed for the CII-EXIM Bank Award for Business Excellence for the year 2008 as per the award criteria. A team of trained assessors worked 800-1000 man-hours in the evaluation of your application and documented their findings in this feedback report. The process of assessment of your application is described on page 8. Signifying the milestones in the journey of Excellence, there are four levels of recognitions, starting from “ Commendation Certificate for Strong Commitment to Excel” and going upto the Award.

Strong Commitment to Excel Commendation for

Significant Achievement Commendation for

Prize

Award

A team of jurors have set the following qualifying criteria for the four levels of recognition, for 2008.

Award : 600 points and above and the Role Model.

Prize : 600 points and above.

Significant Achievement : 500 to 599 points.

Strong Commitment to Excel : 400 to 499 points. The team of jurors has reviewed the findings of the assessment team and made their decision about the applicants for different levels of recognition.



Winners Profile Year 2008

The following applicants were recommended by the Jury for different levels of recognition as they make progress on their journey towards excellence.

Company Main Products/ Services Sales (Rs. Crores) No. of Employees

Prize Winner Large Organisation

The Tinplate Company of India Limited

Electrolytic Tinplate, Tin Free Steel in Sheet Form and Cold Rolled Products in Coil Form

410 Cr

1680

Significant Achievement Certificate for Small and Medium Businesses

Aditya Auto Products & Engineering India Private Limited, Bangalore

Auto Products 98 Cr 366

IP Rings Limited, Maraimalai Nagar

Manufacturers of Steel Piston Rings & Orbital Cold Formed Components

63 Cr 264

PSG Institute of Management, Coimbatore

MBA & Executive Programme 5 Cr 33

Susira Industries Limited, Chennai

Manufacturers of Valve-Train Components & Other Assemblies

20 Cr 215



Significant Achievement Certificate for Large Organisations

Heavy Electricals Plant, Bharat Heavy Electricals Limited, Bhopal

Transformer, Capacitor, Bushings, Switchgear, Control gear, Rectifier, Traction Machines, Motors, Alternators, Hydro Turbines and Generators, Thermal Equipments and Diesel Generator Sets

2808 Cr 7741

Power Sector - Northern Region, Bharat Heavy Electricals Limited

Erection and Commissioning of Power Sector Equipment and related services

645 Cr 534

Exide Industries Limited VRLA and Automotive Batteries 869 Cr 532

Locks Division, Godrej & Boyce Mfg. Co. Ltd.

Locks, Latches, Locking Solutions & Accessories 211 Cr 837

Vijayanagar Works, JSW Steel Limited HR Coils & Pellets 9850 Cr 4155

Ramagundam Super Thermal Power Station, NTPC Limited

Power Generation 2788 Cr 1631

Rallis India Limited Pesticides, Seeds & Special Fertilisers 750 Cr 1014

Diesel Systems business, Bangalore, Bosch Limited

Diesel Fuel Injection System 985 Cr 4274



Significant Achievement Certificate for Small and Medium Businesses

Bunts Tools Company, Nashik

Precision Machines Components

7 Cr 45

Connoisseur Infotech Private Limited, Mohali

B2B Services & Development of Products

5 Cr 42

Eastman Cast and Forge Limited, Ludhiana

Hand & Power Tools 70 Cr 175

Eastman Industries Limited, Ludhiana

Bicycle Components & Accessories

99 Cr

93

Pravin Masalewale, Pune

Manufacturers & Marketers of Pure Indian Spices & Curries

94 Cr 700

TTK Healthcare TPA Private Limited, Bangalore

Payment Processing & Customer Service on behalf of the Health Insurance Industry

36 Cr 519

T V Super Filter Industries, Jammu

Oil, Fuel & Air Filters

5 Cr 50

Village Financial Services Private Limited, Kolkata

Micro Finance 30 Cr 192

Vir Electro Engineering Private Limited, Nashik

Fabrication, Shot Blasting, Zinc Spray Painting & Hot Dip Galvanizing

13 Cr 70

Weir Minerals India Private Limited, Bangalore

Slurry Handling Equipments 35 Cr 122



Strong Commitment Certificate for Large Organisations

Ace Designers Limited Wide Range of CNC Lathes 245 Cr 277

Badarpur Thermal Power Station NTPC Limited


Balasore Alloys Limited

Manufacturing of HC Ferro Chrome 291 Cr 600

Bharat Electronics Limited, Kotdwara

Communication Equipments, Integrated Fire Detection & Suppression System and related turnkey projects

72 Cr 630

Bharat Electronics Limited, Pune

Design, Manufacture and Servicing of Electro-optics Equipments & Systems, Batteries & X-ray Tubes

62 Cr 321

Bharat Heavy Electricals Limited, Jhansi

Design, Manufacturing, Servicing & Commissioning of Transformers, Bus Duct & Locomotives

603 Cr 1744

Birla White White Cement Division, Grasim Industries Limited

Manufacturing of White Cement and Surface Finishing Products 576 Cr 539

Bosch Limited, Jaipur Fuel Injection Equipment - Distributor Pump 969 Cr 1341

Coromandel Fertilisers Limited, Ennore

Phosphatic Fertilisers, Speciality Nutrients and Farming Services 3800 Cr 2287



Coromandel Fertilisers Limited, Kakinada


Coromandel Fertilisers Limited, Visakhapatnam


Components Strategic Business Unit Bharat Electronics Limited

Professional Electronic Components, Solar Photo Voltaic Systems and Projects & Consultancy

241 Cr 1092

Finacle Business Unit from Infosys

Core Banking, e-Banking, CRM, Treasury, Mobile Solutions, Alerts, Web Based Cash Management, Wealth Management

600 Cr 3403

Naval Systems Strategic Business Unit, Bharat Electronics Limited

Radars, Sonars & Communication Systems for Navy

376 Cr 767

Power Sector - Eastern Region, Bharat Heavy Electricals Limited

Erection & Commissioning of Power Sector Equipment and Related Services

1175 Cr 534

GAIL (India) Limited, Pata

Polymers, LPG, Propane & Other By Products 3190 Cr 832

Godrej Consumer Products Limited Soaps & Personal Care Products 800 Cr 1229

ISPAT Industries Limited Hot Rolled Coils 9400 Cr

2560

Lakshmi Precision Screws Limited - Plant 2

High Tensile Precision Fasteners and Cold Forged Products 125 Cr 623

L & T - Komatsu Limited, Bangalore

Hydraulic Excavators, Hydraulic Products & Equipment 1295 Cr 680



Max New York Life Insurance Company Limited

Life & Health Insurance, Retirement Solutions 1598 Cr 7648

Rourkela Steel Plant

Steel Products including Plates, HR Coils/Plates, CR Sheets/Coils, Galvanising Sheets, Pipes, Tin Plates and Silicon Steel Sheets

7400 Cr 21105

Sterlite Industries (India ) Limited

Manufacture and Supply of Copper Cathodes and Rods 12569 Cr 1233

Tata Metaliks Limited Manufacturing and Sale of Pig Iron 764 Cr 314

Turbine Business Group Triveni Engineering & Industries Limited

Power and Heat Solutions in Steam Based Power Generation, includes Design, Manufacturing, Installation, Commissioning & servicing of Steam Turbines

461 Cr 479

UCAL Fuel Systems Limited

Manufacturing of Multi Point Fuel Injection 100 Cr 230

Vindhyachal Super Thermal Power Station , NTPC Limited


Award recipients are not eligible to re-apply for the award for a period of five years. However Award recipients can apply for the assessment and feedback any year. Its application will proceed through the award assessment process and will receive only a feedback report.

Last date for sending Letter of Intent, for CII – EXIM Bank Award for Business Excellence 2009, is 30th April 2009 and the application document should reach CII before 15th June 2009.

Two representatives from the Top / Senior Management will be invited free of cost, to participate in the Quality Summit.

Award Assessment Process - 2008

Final Jury Meeting

Award Presentation

Feedback Report

Site Visits

First Jury meeting

Assessment and Consensus

Applicant Submits Documents

Selection of Assessors

Companies order Application Brochure Potential applicants check eligibility criteria for entry and

requirements of Award Secretariat.

Senior Managers from industry are selected as Assessors.They go through four-day training programme onunderstanding the award criteria and assessment process.

Applicants submit 75 page (maximum) applicationdocuments to CII.

Assessor Team appointed for each applicant. Assessorsindividually list strengths, opportunities for improvementand score. Team meeting to reach consensus score.

Distinguished individuals (about 12) from business andacademia appointed as Jurors. Jurors trained on The Awardmodel and the process. On the basis of Assessor teamreports, Jurors decide on applicants to be site-visited.

Assessor teams appointed make site visits. Assessors meetto plan site visits. Site visits (4 to 6 days typically) are madeto check validity of application and clarify issues.Applications are re-scored and reports are finalised.

Based on reports from site-visited teams, Jurors decide onthe Winners of the Award, Prizes and CommendationCertificates.

The CII-EXIM Bank Commendations are presented to thewinning applicants during the inaugural session of QualitySummit, mostly held during November.

Senior Assessors (Leaders of the Assessment Team) writeFeedback Reports to all applicants identifying theirstrengths/opportunities for improvement. Score-ranges arealso given for each criterion. On request, Senior Assessorvisits applicant to discuss feedback report.


SECTION 2

GUIDELINES TO USE FEEDBACK REPORT



GUIDELINES TO USE FEEDBACK REPORT

The Feedback Report reflects the consensus view of the assessor team on the status of Business Management Practices (Enablers) and Achievements (Results) against the nine criteria of the model.

The Feedback Report has three components:

(a) EXECUTIVE SUMMARY (Section 3) It is meant for the CEO and Top Management and gives a brief overview of company's

status against the nine criteria of the Model.

(b) SCORING PROFILE (Section 3) The scores are given in 10% band for each of the nine criteria (not for sub criteria) and the

overall score in 50 point band. The scoring profile reflects the degree of implementation in quantitative terms.

(c) ASSESSMENT (Section 4) It is basically meant for the management team that is responsible for making

improvements in the organisation. Against each sub criterion, main ‘Strengths’ and ‘Opportunities for Improvement’ are given.

The Feedback Report (Assessment Report and Scoring Profile) can benefit the organisation in many ways. For example:

A means to educate people in the organisation on the Strengths and Opportunities for Improvement of the company. To diagnose what is lacking in the organisation and focus the improvement

in the areas where these are most needed. A means of developing continuous improvement programme and measure

progress on it over time through periodic Self Assessments. A means to benchmark against other companies using the same model both

in domestic as well as overseas markets. A means to recognise both progress and outstanding levels of achievement

through internal awards.

(d) PLAN FOR IMPROVEMENT: The Feedback Report provides inputs to management decision-making process. Each organization can use it in a manner it deems fit. It is suggested that the findings of the Feedback Report be shared amongst the members of Senior Management. In order to facilitate this, copies of the Feedback Report may be distributed to members of Senior Management team. (CD of Feedback Report is sent by CII along with hardcopy to the organization.) CEO could facilitate a discussion to develop common understanding of the findings of the Feedback Report. Senior Assessor may be invited, for an interaction with the senior management team to provide clarifications/elaborations, through CII. CEO along with senior management team, to develop consensus on priority areas for improvements in a systematic manner. While the management can choose an appropriate approach and adapt it to their needs depending on the progress made on its journey towards Excellence, the following approaches are suggested for prioritising the action points for improvement.


Approach I (a) Identify Key Result parameters and set targets for achievements. Examine Strengths and

Opportunities for Improvement (OFIs) in Customer Satisfaction, Business Results, People Satisfaction and Impact on Society. Benchmarking against competitors/World Class companies is helpful in setting targets.

(b) Identify Key Business Processes to achieve the above Results. Look into “Process” criterion for working out an approach to do this in an effective manner. Strengths and OFIs in this category should provide guidance to prioritise the actions.

(c) Examine the Strengths and OFIs of other Enablers e.g. Leadership, Policy and Strategy, Resources, and People Management. Identify key Strengths and OFIs, which are required to support the effective implementation of Key Business Processes, identified at step (b) for achieving the Results at step (a).

Approach II (a) Identify the areas where performance (see Result Categories) has been below

targets/competition. Prioritise based on scoring profile and the Policy and Strategy requirements of the company (if defined).

(b) Establish the linkages between the desired “Results” and the Strengths and OFIs in “Enablers”, through brainstorming sessions with management team.

(c) Identify 5 Strengths and 5 OFIs against each Enabler category inclusive of all criterion parts (5 x 5 = 25 Strengths and 25 OFIs) which have major impact on the Results.

(d) Short-list 5 Strengths and 5 OFIs out of 25 Strengths and OFIs. (e) Plan your improvement activities based on the findings at step (d).

Approach III (a) Prioritise the Strengths and OFIs of the nine criteria using a selection matrix based on the

following: • Impact on Customer • Impact on business bottom line • Problem severity • Team’s ability to solve • Team’s ability to solve quickly • Team’s ability to solve with low cost • Linkage with organisation’s Long Term Plans (b) Give score on a scale of 1 to 5 (1 being the least and 5 being the highest). Total the score

and determine the priority number for each Strength and OFI. (c) Work on the high priority issues. All issues getting scores equal to or higher than 25 points

must be attended to without hesitation. The issues scoring less than 25 points may or may not be acted on this point.


ACTION PLAN An organisation should work on the few OFIs that will improve the business most and work on the one or two Strengths, which, if made better, would put it into a “Best in Class” or “World Class Category”. Based on the above, now develop the improvement strategy and identify key initiatives to bring the desired improvement in the organisation. It is suggested that the following activities should be considered for an implementation plan for continuous improvement. Management’s acceptance and involvement should be obtained on the organisation’s strategy for improvement and implementation plan.

(a) Schedule and budget for the improvement areas (projects). (b) Integration of selected Strengths and OFIs into business plans. (c) Selection and allocation of teams/task forces for specific projects. (d) Use of problem solving process to attack the root cause(s), and working out a

solution for implementation. (e) The team may need to do the following for working out a solution:

Conducting a pilot Benchmarking against World Class Process from another company or for a

multi-unit organisation, internal benchmarks can also be considered as appropriate in the early part of Excellence journey. Assigning a separate expert team to come with solution Undergo training on specific tools and techniques for improvement.

(f) Management reviews on the status of the project teams and implementation of the solution.

(g) Conduct self-assessment as per the model in 9-12 month intervals to track the progress.



SECTION 3

EXECUTIVE SUMMARY AND SCORE SHEET


CII-EXIM Bank Award for Business Excellence: Feedback Report 2008 20CII-EXIM Bank Award for Business Excellence: Feedback Report 2008 20

SECTION 4

ASSESSMENT REPORT

Strengths and Opportunities for Improvement




Strengths and Opportunities for Improvement

(Sub Criterion wise)


1. Leadership : Excellent Leaders develop and facilitate the achievement of the mission and vision. They develop organisational values and systems required for sustainable success and implement these via their actions and behaviours. During periods of change they retain a constancy of purpose. Where required, such leaders are able to change the direction of the organisation and inspire others to follow. 1a Leaders develop the mission, vision, values and ethics and are role models of a culture of

Excellence They may include :

• developing the organisation’s mission, vision and culture; • developing and role modelling values, ethics and public responsibilities that support the

culture; • reviewing and improving the effectiveness of personal leadership behaviours; • being actively involved in improvement activities; • stimulating and encouraging empowerment, creativity and innovation, e.g. by changing

the organisation’s structure, funding learning and improvement activities; • encouraging, supporting and acting upon the findings of learning activities; • prioritising improvement activities; • stimulating and encouraging collaboration within the organization

Elements Score

Attributes 0% 25% 50% 75% 100%

Sound: • approach has a clear rationale • approach has defined processes • approach focuses on stakeholder

needs

No results or anecdotal

Some Evidence Evidence Clear evidence Comprehensive evidence

Integrated: • approach supports policy and

strategy • approach is linked to other

approaches as appropriate

No evidence or anecdotal


Approach

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%

Implemented: • approach is implemented No evidence

implementation Implemented in

about 1/4 of relevant areas

Implemented in about 1/2 of

relevant areas


relevant areas

Implemented in all relevant areas

Systematic: • approach is deployed in a

structured way with the method used for deployment being planned and executed soundly


Some evidence Evidence Clear evidence Comprehensive evidence

Deployment

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score Attributes 0% 25% 50% 75% 100%

Measurement: • regular measurement of the

effectiveness of the approach and deployment is carried out.



Learning: is used to:

• identify best practice and improvement opportunities



Improvement: Output from measurement and learning is analysed and used to:

• identify, prioritise, plan and implement improvements



Assessment & Review

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 Overall Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 Anecdotal Basic Competitive Advanced World Class


1. Leadership

1a

Strengths

1. Top leaders of BHEL develop vision, mission and strategic plans once in five years, involving the leaders and employees of all the units. During the last review, undertaken in 2006, the company has developed the current VMV, focusing enhancement of stakeholder value.

2. Senior leaders like GMs and Product Chiefs are personally involved in championing and reviewing improvement activities deployed to improve organizational performance viz. PIP, PIR, QCC, CFT, QIP, SIX SIGMA, DTC, LEAN. Manthan 2007 led to evolving DWM, ED's Dashboard etc.

3. ED and GMs personally communicate relevant policies and strategies to union members and other employees through various committee meetings, MECOM, Shop Councils and other fora.

Opportunities for Improvement

1. Although GMs and HODs participate in Inter Unit Functional Heads' Meet, to capture best practices of other units, it is not clear how the leadership uses such information and data for bringing improvement in the unit in an integrated manner.

2. Although leaders are reported to practice the values as role models, it is still not very clear how the code of conduct and ethics are practiced.

3. Although leadership effectiveness has been assessed through two sample surveys to obtain feedback on leadership style of Top Mgmt, it is not evident how it has been used in enhancing effectiveness of personal leadership behaviour


1. Leadership : Excellent Leaders develop and facilitate the achievement of the mission and vision. They develop organisational values and systems required for sustainable success and implement these via their actions and behaviours. During periods of change they retain a constancy of purpose. Where required, such leaders are able to change the direction of the organisation and inspire others to follow.

1b Leaders are personally involved in ensuring the organisation's management system is

developed, implemented and continuously improved This may include :

• aligning the organisation’s structure to support delivery of its policy and strategy; • ensuring a system for managing processes is developed and implemented; • establishing clear ownership of processes; • ensuring a process for the development, deployment and updating of policy and strategy

is developed and implemented; • ensuring a process for the effective governance of the organisation is developed and

implemented; • ensuring a process for the measurement, review and improvement of key results is

developed and implemented; • ensuring a process, or processes, for stimulating, identifying, planning and implementing

improvements to enabling approaches, e.g. through creativity, innovation and learning activities, is developed and implemented.

Elements Score

Attributes 0% 25% 50% 75% 100%

Sound: • approach has a clear rationale • approach has defined processes • approach focuses on stakeholder needs



Integrated: • approach supports policy and strategy • approach is linked to other approaches

as appropriate



Approach

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%





relevant areas


relevant areas






Deployment

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score Attributes

0% 25% 50% 75% 100%













Assessment & Review



1. Leadership

1b

Strengths

1. The Unit's organisation structure is aligned with the BHEL Corporate with CMD and the Directors providing policy guidelines. The ED, a member of the Corporate Management Committee, runs the unit with the support of Product and Functional Managers. ED monitors key performance parameters through on line Visual Dashboard and reviews through a review process.

2. The Leadership has established documented SOPs, MIS, DWIs, Product Standards, Process Specifications, defined KPOs and measures as KPIs for managing processes like Tendering, Order Processing, Design & Development, Procurement, Manufacturing, Inspection & Testing, Packing & Despatch and Services.

3. Leaders at corporate and Unit level develop policy and strategy in a participative manner viz. Works Policy, Purchase Policy, AIDs Policy, KM Policy etc are evolved at Corporate. P&D Group at Unit level formulates product growth strategies and plans. This evolution has gone through as ""Perspective for 2002,"" ""Strategic Plan 2002 - 2007"" and presently as ""Strategic Plan 2007 - 2012.""


1. The business plans and improvement initiatives of the unit are cascaded down through BSC and KRAs, which are reviewed once in six months. It is not so evident what were the findings of these reviews followed by refinements in the same and also whether this review frequency is adequate to make course corrections and improvement.

2. While the leaders at BHEL Bhopal implement and review the management system through review of key processes, improvement initiatives, BSC -- etc., it is not evident that adequacy and effectiveness of various fora are evaluated towards involvement of stakeholders like customers, vendors, strategic planners -- etc. for improvement in management systems as related with them.

3. Although the Unit leadership has provided a number of structured platforms and opportunities for planning and implementing improvement projects, it is not evident how the leadership assesses effectiveness of these towards capturing and utilising creative and innovative ideas of people at all levels across the Unit beyond the manufacturing area.



1c Leaders are involved with customers, partners and representatives of society

This may include :

• meeting, understanding and responding to needs and expectations; • establishing and participating in partnerships; • establishing and participating in joint improvement activity; • recognizing individuals and teams of stakeholders for their contribution to the business,

for loyalty etc; • participating in professional bodies, conferences and seminars, particularly promoting

and supporting excellence; • promoting, supporting and engaging in activities that aim to improve the global

environment and the organisation’s contribution to society with the view to respecting the rights and interests of future generations.

Elements Score

Attributes 0% 25% 50% 75% 100%





as appropriate



Approach

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%





relevant areas


relevant areas


Systematic: • approach is deployed in a structured

way with the method used for deployment being planned and executed soundly



Deployment

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100














Assessment & Review



1. Leadership

1c

Strengths

1. ED, Product Heads, GMs and other senior managers meet customers in pre tenders, pre orders and kick off meetings for projects, to discuss project related issues and understand their needs and expectations.

2. Heads of several groups participate in joint improvement projects for design changes, problem solving, component development and improvement. The leadership also interacts with vendors, technology providers, premier institutions, suppliers and individual experts towards collaboration for mutual benefits.

3. Senior leaders participate in number of professional bodies viz. NSC, RRL, IIMM etc, and contribute to learning through presentation of papers on technology to promote excellence. They also actively associate themselves with these bodies as chairmen / members.

4. Leadership addresses the needs of society through structured approaches and activities in the areas of health, education, environment, community development etc. Leadership also supports the ten principles of UN's global compact programme on human rites, labour standards etc


1. While the Unit Leadership interacts and collaborates with different stakeholders, it is not evident how it recognises its loyal customers or performing vendors / suppliers for contribution to the business



1d Leaders reinforce a culture of Excellence with the organisation’s people

This may include :

• personally communicating the organisation’s mission, vision, values, policy and strategy, plans, objectives and targets to people;

• being accessible, actively listening inspiring, uniting and responding to people; • helping and supporting people to achieve their plans, objectives and targets; • motivating and enabling people to participate in improvement activity; • recognizing both team and individual efforts, at all levels within the organisation, in a

timely and appropriate manner; • promoting and encouraging equal opportunities and diversity.

Elements Score

Attributes 0% 25% 50% 75% 100%





as appropriate



Approach

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%





relevant areas


relevant areas






Deployment

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100


0% 25% 50% 75% 100%













Assessment & Review



1. Leadership

1d

Strengths

1. The Unit Leadership, comprising ED, GMs, PMs, HODs personally communicate various short term plans, objectives and targets to employees through forums like plant council, shop council, IR meeting with recognised union, particularly on 26th January, 15th August and first day of financial year etc. Achievements of other Units also are shared.

2. GMs, PMs & HODs motivate employees to participate in improvement activities like, IMPRESS, QCs, Six Sigma through institutionalised recognition and reward scheme. They also encourage people by being champions of improvement initiatives like LEAN, DTC etc.


1. Although senior leadership focuses excellence in product, manufacturing processes as well

as in operational performance and communicates & reviews these in a very structured manner, yet key people processes, overall house keeping across the Unit as well as safety practices need specific attention to demonstrate overall excellence.

2. Although mentorship is practised at senior leadership level, it is not evident how managers play the role of mentor, coach, counsellor and trainer effectively.



1e Leaders identify and champion organisational change

This may include :

• understanding the internal and external drivers of change for the organisation; • identifying and selecting changes that need to be made within the organisation, to the

organisation model and in its external relationships; • leading the development of change plans; • securing investment, resources and support for change; • managing the delivery and risks of the overall portfolio of change programmers; • ensuring the effective delivery of change and managing stakeholders; • communicating changes and the reasons for them to the organisations people and other

stakeholders; • supporting and enabling people to manage change; • measuring and reviewing the effectiveness of changes and sharing the knowledge gained.

Elements Score

Attributes 0% 25% 50% 75% 100%





as appropriate



Approach

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%





relevant areas


relevant areas






Deployment

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100














Assessment & Review



1. Leadership

1e

Strengths

1. The leadership has endeavoured to bring change in the Unit to meet operational challenges like i) Filling technology gaps in engineering ii) New product development, iii) Capacity augmentation of hydro / transformer/ motor. iv) Improved material handling system.

2. The Unit leadership has drawn up an investment plan of Rs 1200 Crores during 2007 - 2012, have taken the services of reputed consultants to launch new performance management system like e-map as well as change in strategy planning.

3. Based on the recommendations of the external consultants the leaders have focused on some key changes viz: reposition the organisation, improve the business strategy, and enhance organisational effectiveness and capability. The leadership is addressing these through a planned approach viz., with time bound change plan and perceived risks.


1. While change management has addressed enhancing organisational capability and

effectiveness along with people performance management system (e-map), it does not appear to address critical processes related to people competence, training & development and involvement at every level to enhance people capability. HR change plan addresses only numbers.

2. It is not evident if the intent of change needed is communicated to stakeholders such as customers, and suppliers through a structured approach.


2. Policy and Strategy : Excellent Organisations implement their mission and vision by developing a stakeholder focused strategy that takes account of the market and sector in which it operates. Policies, plans, objectives, and processes are developed and deployed to deliver the strategy.

2a Policy and Strategy are based on the present and future needs and expectations of stakeholders

This may include :

• gathering and understanding information to define the markets and market segments the organisation will operate in both now and in the future;

• identifying, understanding and anticipating the needs and expectations of current and future stakeholders including customers, employees, partners, society and shareholders;

• identifying, understanding and anticipating developments in the market place, including competitor activity.

Elements Score

Attributes 0% 25% 50% 75% 100%





as appropriate



Approach

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%





relevant areas


relevant areas






Deployment

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100














Assessment & Review



2. Policy and Strategy

2a

Strengths

1. The Unit and the corporate, as relevant, capture needs of various stakeholders like shareholders, customers and employees through management meetings, surveys, meet, feedbacks and reports from external agencies.

2. BHEL has used professional facilitation from agencies like m/s McKinsey for providing inputs on business environment, thus enabling the organisation to take fresh initiatives on business strategy, organisational effectiveness and capability building. of the senior leaders of Bhopal unit played a lead role in rolling out DTC and LEAN as support initiatives.

3. BHEL has an established process, for understanding the future scenario of the industry, for

different time horizons and different business segments as well as on competition as part of the Policy & Strategy development process.


1. Although excellence in product is a highly focused area and product benchmark data is

collected and used in strategic planning, ‘process’ benchmarking is not given the similar attention, which could enable BHEL Bhopal becoming a world class MNC.

2. While needs of various stakeholders are considered during planning process, the same is not apparent in the case of vendors having significant roles to play in fructifying strategic plan 2012. In last year's survey only 130 vendors out of total about 2500 vendors were covered in the perception survey, it is not evident that the sample selected is on statistical basis and could represents the population.

3. While the company has 15% export sales, in the absence of data it is not evident how needs and expectations of current and potential overseas customers are captured and used in formulation of policy and strategy.



2b Policy and Strategy are based on information from performance measurement, research, learning and external related activitiesThis may include : • analyzing output from internal performance indicators; • analyzing output from learning activities; • analyzing external image and brand awareness data; • analyzing the performance of competitors and best in class organisations; • analyzing data regarding existing /potential partners core competencies; • analyzing data for both long and short term social, environmental, safety and legal issues; • analyzing data on the effects of products and services throughout their entire life-cycle; • identifying and understanding economic and demographic indicators; • analyzing data to determine the impact of new technologies and business models on the

performance of the organisation.

Elements Score

Attributes 0% 25% 50% 75% 100%





as appropriate



Approach

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%





relevant areas


relevant areas






Deployment

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100














Assessment & Review




2b

Strengths

1. Ten-year digest of internal performance is used for financial analysis and a base for product - wise analysis. The market research reports related to product lines and product developments are discussed in MCM and decisions are taken for formulation of strategies

2. Outputs from TMWs at corporate level are considered as one of the inputs for P&S by Bhopal unit. Information about growth, economy, demand patterns, Govt. policies, competitor data -- etc., is used for Unit level strategic plans.

3. Various data on economic & demographic changes, Govt. policies, investment projections, market projections, demand and consumption pattern, competition related etc., are analysed using SWOT analysis, Product Portfolio analysis, Growth - Share Matrix, Dupont Chart methodology etc as part of the Strategy development process.


1. While various customers related data are collected and analysed, the use of data from research & learning activities including foreign visits, product life cycle analysis etc. is not seen.

2. There is not enough evidence on how core competencies of existing and potential partners are assessed & analysed and how these influence Units policy & strategy.



2c Policy and Strategy are developed, reviewed and updated

This may include:

• developing, reviewing and updating policy and strategy consistent with the organisation’s mission, vision and concepts of Excellence;

• balancing both long and short-term needs and expectations of stakeholders; • assessing risks and identifying ways of addressing these risks; • identifying present and future competitive advantage; • identifying core capabilities and needs for partnerships/alliances to deliver policy and

strategy; • reaffirming presence in established markets or requirement to change market approach; • aligning strategy with those of partners and alliances; • identifying critical success factors; • aligning and continuously developing social and environmental standards with partners; • evaluating the relevance and effectiveness of policy and strategy.

Elements Score

Attributes 0% 25% 50% 75% 100%

Sound:

• approach has a clear rationale • approach has defined processes • approach focuses on stakeholder needs




as appropriate



Approach

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%





relevant areas


relevant areas






Deployment

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100














Assessment & Review




2c

Strengths

1. The Unit associates itself in the strategy development process at the corporate level to fine tune the unit’s strategies keeping in view the overall company wide targets and strategic directions. This process has been refined over the past 30 years and currently integrates all the Units in the process to ensure the needs of its customers.

2. P&D Group, at the Unit level, prepares the draft strategy in consultation with the product group owners considering the corporate product strategies and growth plans from corporate level. P&D Group prepares a five-year strategic plan after discussion with ED and GMs. This is finally approved by corp. office.

3. Policies and Strategies are deployed across the company through Corporate Strategic Plan, Strategic Divisional Plan, Three Year Rolling Plan, Annual Budget and deployed through BSC at Unit, GM & HOD level and finally through individual KRA / e-Map. These are deployed / achieved through a number of key processes and sub processes with appropriate process measures, derived from CSFs and owned by CSF champions. Current strategic plan is '2007-12'. Top management reviews Three year rolling plan on an annual basis.


1. While the unit has identified long term CSFs for 2012 and also CSFs for 2007-08, there are no CSFs identified, which address major stakeholders like vendors and society.

2. While the Unit is keeping its existing customers happy, in certain segments, by renovation and modernisation of the existing equipment, it is not evident how the risk of technological obsolescence is addressed.



2d Policy and Strategy are communicated and deployed through a framework of key processes

This may include :

• identifying and designing and communicating the framework of key processes needed to deliver the organisation’s policy and strategy;

• communicating policy and strategy to stakeholders and evaluating the awareness of it; • aligning, prioritising, agreeing, cascading and communicating plans, objectives and

targets as well as following up achievements; • establishing organisation wide reporting mechanisms to track progress.

Elements Score

Attributes 0% 25% 50% 75% 100%

Sound:





as appropriate



Approach

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%





relevant areas


relevant areas






Deployment

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100














Assessment & Review




2d

Strengths

1. The Unit has documented its SOPs, MIs, and DWIs etc along with respective owners and measures. CSFs, identified for 2007 - ‘08 are linked to various Unit level key processes viz. Planning, Material Procurement, Cash Collection etc., with defined output measures.

2. All unit level goals and targets, for the year, are cascaded down and linked to employees through their annual KRAs. These are monitored and reviewed under BSC, through e-map. A unit wide reporting mechanism is established with set frequency, along with identified facilitators and reviewers. Senior leaders and departmental meetings communicate the strategic targets across all levels of employees through various means such as display boards, address.


1. The Unit has identified nine processes viz. from planning... to Lean Management as Key Processes for the year 2007 - '08. It has identified another nine processes viz., from Tender Processing, Manufacturing, Inspection and Testing ... to Services as Business Processes. At the same time, Marketing & Sales, Project Management and Materials Management have been cited as Business Processes. However, it is not clear what framework, of key processes, has been identified, designed and communicated to all concerned to deliver its policy & strategy and enable its people to have uniform understanding across the organisation.

2. Although BSC is cascaded and KRAs of individuals are monitored, it is not evident how the action plans to achieve KRA are formulated and reviewed effectively for its progress.

3. It is not evident how the Unit evaluates the awareness of action plans against long term CSFs at all levels as applicable.


3. People : Excellent organisations manage, develop and release the full potential of their people at an individual, team-based and organisational level. They promote fairness and equality and involve and empower their people. They care for, communicate, reward and recognize, in a way that motivates staff and builds commitment to using their skills and knowledge for the benefit of the organisation.

3a People resources are planned, managed and improved

This may include : • developing human resource policies, strategies and plans; • involving employees, and their representatives, in developing human resource policies,

strategies and plans; • aligning the human resource plans with policy and strategy, the organisational structure

and the framework of key processes; • managing recruitment, career development and succession planning; • promoting and ensuring fairness in all terms of employment including equal

opportunities policies, strategies and plans; • using people surveys and other forms of employee feedback to improve human resource

policies, strategies and plans; • using innovative organisation methodologies to improve the way of working, e.g.

restructuring the supply chain, flexible team working.

Elements Score

Attributes 0% 25% 50% 75% 100%

Sound:





as appropriate



Approach

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%





relevant areas


relevant areas






Deployment

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100














Assessment & Review



3. People

3a

Strengths

1. The Unit HR plans are developed & cascaded from Corporate Vision, Mission & Values, Corporate HR policy / Personnel Manual, HR Pole Stars etc. Feedback from employees through 3 tier participative management forums is taken for developing HR policies / plans. Improvements have been brought in - based on employee feedback.

2. BHEL has prepared HR Manual containing policies related to employment, perks and benefits. The manual is updated every five years through deliberations in high level CFTs constituted specifically. The strategies are formulated both at corporate level as well as at unit level.

3. There is a grievance procedure and three-tier participation of workers-joint committee at corporate level to discuss various issues. Employee perception surveys are conducted periodically, once in two years since 2005.


1. The unit has an approach of employee career development, however its soundness and systematic implementation in terms of categorizing number of employees identified based on their potential with career development plans chalked out for them as per organization's future needs is not so evident. This is important in view of two CSFs, 'Bridging gaps 'and' Capacity enhancement'.

2. Though EPS is being conducted since 1998, with the questionnaire having been revised thrice, response rate being low (less than 20%) and average satisfaction level showing marginal improvement (from 5.6 to 6.2), the effectiveness of this employee feedback process itself appears to be low.

3. Although employees go through leadership development programme at various levels, it is not evident how effectiveness of such training & development programme is measured and acted upon.



3b People’s knowledge and competencies are identified, developed and sustained

This may include :

• identifying, classifying and matching people’s knowledge and competencies with the organisation’s needs;

• developing and using training and development plans to help ensure people match the present and future capability needs of the organisation;

• Developing, mentoring and training all people to help them realise and attain their full potential;

• designing and promoting individual, team and organisational learning opportunities; • developing people through work experience; • developing team skills; • aligning individual and team objectives with the organisation’s targets; • reviewing and updating individual and team objectives; • appraising and helping people improve their performance.

Elements

Score Attributes 0% 25% 50% 75% 100%

Sound:





as appropriate



Approach

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%





relevant areas


relevant areas






Deployment

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100














Assessment & Review



3. People

3b

Strengths

1. The Unit has a system for training and development of employees at entry level, through e-map (PMS), and depending on the needs of function / activity they are associated with. Various training programmes are ' Dakshata ' for ETs, multiskilling and knowledge worker for artisans, Six Sigma, DTC, LEAN -- etc. Opportunities are also provided to employees to develop allied skills by using them as assessors in various systems.

2. The Unit supports and encourages the employees for enrolling as members of professional bodies, subscription for magazines, participation in national / international seminars, Internet - etc., to facilitate the learning process.

3. HR Data base having employee profile is used for job rotation at inter and intra dept level as per need. HR executives are being trained for PCMM as a part of their future plan. The perfromance at executive level is measured through BSC and e-MAP and appraisal of supervisors and workers is done through ACR. They are given the feedback on inferior performance. Appraiser in consultation with the appraisee identifies developmental competencies and training is provided for improvement


1. It is not evident how the job description of the employees is analysed, reviewed and kept updated. Though competency mapping has been done for individuals in management level, it is not evident if gap analysis has been done and the outcome has been acted upon to enhance competence.

2. Though feedbacks are taken at the end of induction training and various training programme, it does not appear that effectiveness of a critical process like training & development is measured. Nor these are compared with any benchmark.

3. Although feedback is taken at the end of training programme and subsequently from self and superior, it is not evident how effectiveness of training is measured at different levels.



3c People are involved and empowered

This may include :

• encouraging and supporting individual and team participation in improvement activities;

• encouraging and supporting people’s involvement e.g. through in-house conferences, ceremonies and community projects;

• providing opportunities that stimulate involvement and support innovative and creative behavior;

• training managers to develop and implement guidelines empowering people to take action;

• encouraging people to work together in teams

Elements Score

Attributes 0% 25% 50% 75% 100%

Sound:





as appropriate



Approach

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%





relevant areas


relevant areas






Deployment

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100


0% 25% 50% 75% 100%













Assessment & Review



3. People

3c

Strengths

1. The Unit has been implementing improvement initiatives by involving employees to form CFTs, Quality circles, Six Sigma teams, Self directed teams for DTC and LEAN, Suggestion Schemes etc. Web based IMPRESS was launched in 2004-05 to integrate all improvement initiatives The Business excellence movement is steered through Business councils at unit level, Product/ functional level

2. The Unit involves its employees through JIP involving customers and partners as part of improvement projects. There is also involvement through in-house conferences, seminars, community projects, and large-scale celebrations. Innovations are encouraged from employees through IPR incentive scheme. Employees are empowered through various delegations of powers.


1. While there are number of platforms for employee involvement and the end result is

monitored through savings accrued, prizes given, it is not evident how employee involvement as a process is measured and improved in the absence of defined KPIs, facilitating evaluating the effectiveness.

2. While employee involvement approaches address management staff, supervisors and workmen, it does not appear to address contract workmen, which is more than 3000 in number and non involvement may not be conducive to desired human relations and work ambience in the Unit.

3. It is not evident that the Unit provides training to its managers to facilitate development of guidelines for people empowerment.



3d People and the organisation have a dialogue

This may include:

• identifying communication needs; • developing communications policies, strategies and plans based on communications

needs; • developing and using top down, bottom up and horizontal communication channels; • identifying and ensuring opportunities to share best practice and knowledge.

Elements Score

Attributes 0% 25% 50% 75% 100%

Sound:





as appropriate



Approach

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%





relevant areas


relevant areas






Deployment

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100














Assessment & Review



3. People

3d

Strengths

1. Communication needs are identified through surveys, structured bipartite meetings and other forums of communication. Sr. leaders communicate the business plan at the beginning of every year to executives and employee representatives. In house magazines and newsletter are also used for communication.

2. There are seven advisory councils like PF trust, canteen committee, grievance committee, medical committee – etc., where employee representation is there and they express and exchange their views, opinions and needs with management.


1. Although there are number of channels for communication, it is not evident how effectiveness of these channels is measured, even as issues addressed are mostly operations related and not the change process which will enable the Unit to become world class enterprise.



3e People are rewarded, recognised and cared for

This may include :

• aligning remuneration, redeployment, redundancy and other terms of employment with policy and strategy;

• recognising people in order to promote and sustain their involvement and empowerment; • promoting awareness and involvement in health, safety, the environment and issues on

social responsibility; • setting the levels of benefits, e.g. pension plan, health care, childcare; • recognising and taking account of diversity and different cultural backgrounds

promoting social and cultural activities; • providing resources and services that meet legal essentials and in some cases, exceed

these requirements.

Elements Score

Attributes 0% 25% 50% 75% 100%

Sound:





as appropriate



Approach

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%





relevant areas


relevant areas






Deployment

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100














Assessment & Review



3. People

3e

Strengths

1. The compensation of the employees is made through New Reward Scheme using PIP as a yardstick to measure both physical and financial performance. It is linked to BSC score of the company. There has been substantial increase in reward with PP and SIP system. CMD hosts a dinner every year to recognise the award winners.

2. In 2008, a new reward scheme has been introduced for recognition of individual and collective performance. A significant rise is made in PP and SIP payments to employees to encourage them for better performance and to retain talent.

3. There are various awards, at unit level and co. level, to recognize people for their meritorious performance. Some of these are IMPRESS, Quality Circle award, Safety award, Suggestion award, BEAT, IPR incentive -- etc. at unit level and Utkrishtha Puraskar, Gunavatta Puraskar, Utpadakata Puraskar, Anusandhan Puraskar at corporate level.

4. The factory and hospital are ISO 14001 and OHSAS 18001 certified. Employees are trained on first aid, stress management, prevention of AIDS -- etc., Medical facilities like 350 bed hospital, yoga centre, sports club – etc., are provided to all employees


1. It is not evident whether the unit's leadership has any approach towards the work life balance of employees.

2. Although the Unit is certified to OHSAS and lot of awareness programmes is held, the deployment and effectiveness of such initiatives is not being pursued, as seen from the use of PPE in an adhoc manner, in various plants of the Unit.


4. Partnerships and Resources : Excellent organisations plan and manage external partnerships, suppliers and internal resources in order to support policy and strategy and the effective operation of processes. During planning and whilst managing partnerships and resources they balance the current and future needs of the organisation, the community and the environment.

4a External partnerships are managed This may include : • identifying key organisation and community partnership opportunities in line with

policy and strategy and the organisations mission; • structuring partnership and supplier relationships to create and maximise value; • forming supply chain partnerships that add value to customers; • Identifying and leveraging core competencies of partners and supporting mutual

development; • ensuring cultural compatibility and the sharing of knowledge with partner organisations; • generating and supporting innovative and creative thinking through the use of

partnerships; • creating synergy in working together to improve processes and add value to the

customer/supplier chain.

Elements Score

Attributes 0% 25% 50% 75% 100%

Sound:





as appropriate



Approach

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%





relevant areas


relevant areas






Deployment

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100














Assessment & Review



4. Partnerships and Resources :

4a

Strengths

1. BHEL identifies the opportunities of JV and alliances in line with the strategic objectives, considering present capacities and capabilities. .

2. The Unit has developed various strategic alliances, for product and technology development. These are with organizations like Toshiba, Siemens, Strukton Systems, CVRDE -- etc. It has also JVs with customers like NTPC, NPCIL, and Railways etc.

3. The Unit has a vendor base, 2500 nos., which play a vital role in supply chain. The unit supports some of them by providing technical guidance, trainings, tools, gauges -- etc. They are also helped to upgrade themselves through assessment, audits and performance rating.

4. The Unit holds product wise supplier meets. It also has some JIPs with vendors to develop components like commutator & impeller and for packaging improvement.


1. Even though the Unit has vendor rating system, has JIPs with vendors and meets, there is little evidence of recognition by any form to these important partners.



4b Finances are managed This may include : • developing and implementing financial strategies and processes for using financial

resources in support of overall policy and strategy; • designing the financial planning and reporting to cascade the financial stakeholders

expectations throughout the organisation; • establishing reporting mechanisms; • evaluating investment in and divestment of both tangible and non tangible assets; • using financial mechanisms and parameters to ensure an efficient and effective resourcing

structure; • developing and introducing methodologies for managing risks to financial resources to all

appropriate levels in the organisation; • establishing and implementing core governance processes at all appropriate levels in the

organisation.

Elements Score

Attributes 0% 25% 50% 75% 100%

Sound:





as appropriate



Approach

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%





relevant areas


relevant areas






Deployment

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100


0% 25% 50% 75% 100%













Assessment & Review




4b

Strengths

1. The Unit has established and deployed a financial management process. Various revenue and cost budgets are prepared specifying the cash flow and working capital requirements. Financial analysis is carried out for all new investments proposals in terms of NPV & IRR.

2. The financial management practices of the Unit support growth, profitability, cost competitiveness and capacity & capability enhancement. These are aligned with company P&S and are reviewed at Unit level and corporate level in important meetings like ED's cash review meetings, MCM, capital budget meetings, Finance head meetings – etc.

3. Revenue budget including turnover, material Consumption, gross billing, margins, EVA, cash flows, profitability -- etc., is prepared product wise / function wise at unit level. Capital budget in the form of schemes / feasibility reports is prepared by P&D group at unit and at corporate level.

4. Reports containing financial data are available online through access control mechanism. These contain information as regards gross billing, turnover, debtors, cash collection, LC status, stock movement statements, and materials with suppliers, tax laws – etc.


1. It is not clear how the Unit provides financial resources towards investing into non tangible assets, like Brand Building and Intellectual Properties.

2. Though financial strategies and performance are reviewed at the Unit level and at corporate, it is not evident how financial and accounting processes or departmental practices are reviewed and improved.



4c Buildings, equipment and materials are managed This may include : • developing a strategy for managing buildings, equipment and materials that supports the

organisations policy and strategy; • managing the maintenance and utilization of assets to improve total life cycle

performance; • managing the security of assets; • measuring and managing any adverse effects of the organisation’s assets on the

community and employees (including ergonomics, health and safety); • utilising resources in an environmentally sound manner throughout the entire lifecycle of

a product; • optimising material inventories; • optimising consumption of utilities; • reducing and recycling waste; • minimising any adverse global impact of products, production processes and services;

Elements Score

Attributes 0% 25% 50% 75% 100%

Sound: Approach





as appropriate


Some Evidence Clear evidence Comprehensive evidence

Evidence

10 15 20 25 30 35 40 Total 0 5 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%





relevant areas


relevant areas






Deployment

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100














Assessment & Review




4c

Strengths

1. The Unit has started repairing / modernising its buildings. There had been continuous reduction in material consumption and cost through import substitution. Bulk purchasing of materials (such as copper) are centralised keeping in view the advantages in the price negotiations.

2. The Unit monitors the list of critical equipment at apex level based on projected load. OEE is used for measuring machine utilisation in critical CNC and new machines. OEE is improving. The critical installations are under tight security-by-security personnel, entry through gate pass and smart card controlled door access.

3. The Unit has an established emergency preparedness system and mock drills are carried out. OHS group monitors the environment and emission levels and people working in hazardous areas are subjected to periodical medical examination. Consumption of utilities is regularly monitored with a view to conserve these through various audits and utilise experts for bringing consumption further down.


1. Though implementation of 5S is in the plan, it is still in the very early stage of

implementation.

2. It is not evident that the Unit adopts use of world-class approaches on technology in new building and equipment, whenever opportunity arises.



4d Technology is managed

This may include :

• developing a strategy for managing technology that supports the organisations policy and strategy;

• identifying and evaluating alternative and emerging technologies in the light of their impact on business and the society;

• managing the technology portfolio including the identification and replacement of out dated technology;

• exploiting existing technology; • developing innovative and environmentally friendly technology (i.e. conserving energy

and resources, minimization of waste and emissions, encouraging recycling and re-use); • Using Information and Communication Technologies to support and improve the

effective operation of the organisation; • using technology to support improvement.

Elements

Score Attributes

0% 25% 50% 75% 100%

Sound:





as appropriate



Approach

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%





relevant areas


relevant areas






Deployment

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100














Assessment & Review




4d

Strengths

1. Technical committee deliberates on various issues related to technology to meet current as well as future needs. A five year engineering road map with year wise milestone is prepared by respective product managers and approved by ED. Technology is being continuously improved in association with Corp R&D, Research & Technical Institutes and learning through customer feedbacks.

2. Advance technology group is responsible for up gradation and improvements in manufacturing technology through development projects. The Unit also improves its processes using Information and Communication technology (ICT) and all major processes are IT enabled. IT enabled automation is also used in manufacturing (CNC machines, cranes) as well as in design (3D Modelling, Auto CAD) etc.

3. The unit has set up some state of the art testing facilities like centre for electric transportation, ultra high voltage laboratory and Hydro lab to have a competitive edge. Advance technology group takes care of up gradation facilities e.g.. PLC based control system for Plano miller, SPM for ironing of stator coils insulation – etc.


1. While international technology leaders appear to becoming competitors for the company and may be reluctant in providing technology know how, the Unit’s approach towards strategic / business & technology sharing / tie up along with focus on more self reliance is in a very initial stage.



4e Information and knowledge are managed This may include : • developing a strategy for managing information and knowledge that supports the

organisations policy and strategy; • identifying the organisations information and knowledge requirements; • collecting, structuring and managing information and knowledge in support of policy

and strategy; • providing appropriate access, for both internal and external users, to relevant information

and knowledge; • using information technology to support internal communication and information and

knowledge management; • assuring and improving information validity, integrity and security; • cultivating, developing and protecting unique intellectual property in order to maximise

customer value; • seeking to acquire, increase and use knowledge effectively; • generating innovative and creative thinking within the organisation through the use of

relevant information and knowledge resources.

Elements Score

Attributes 0% 25% 50% 75% 100%

Sound:





as appropriate



Approach

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%





relevant areas


relevant areas






Deployment

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100


0% 25% 50% 75% 100%













Assessment & Review




4e

Strengths

1. The Unit's IT networks is utilised for collecting, structuring and managing information and knowledge. The sensitive data is controlled through passwords. The validity, integrity and security of information are ensured through structured documentation. Procedures are in place for taking cold backups, users backups and incremental backup for all servers.

2. The Unit has an intranet website which has portals of all departments for knowledge management and information exchange using LAN connectivity. The knowledge in the Unit is preserved and enhanced. Some other initiatives used for knowledge sharing, are contribution in BHEL Journal booklets on achievements, Ten Years Digest. IPR patenting is encouraged through a structured approach for filing of patents. There are incentives for submission of patents.

3. At Bhopal Unit, knowledge is acquired through own experience and development, central library and Internet facility provided to all executives. The knowledge thus gained is preserved through product specific document, drawing, specifications, collaborator documents, journals, portals, monthly highlights – etc.


1. While a lot of work has been done in knowledge management area both IT enabled and non IT enabled, it is not evident that a system has been evolved to assess the usage of this organised knowledge as well as how to enhance such usage to add more value to the organisation, particularly towards making the Unit World Class.

2. It is not evident how the Information and knowledge requirements are aligned to short

term and long term action plans and these are prioritised. It is also not evident how the IT infrastructure has enabled the access to all stakeholders.


5. Processes : Excellent organisations design, manage and improve processes in order to fully satisfy, and generate increasing value for, customers and other stakeholders.

5a Processes are systematically designed and managed

This may include :

• designing the organisation’s processes, including those key processes needed to deliver policy and strategy;

• identifying process stakeholders and managing interface issues inside the organization and with external partners for the effective management of end-to-end processes;

• establishing the process management system; • applying systems standards covering, for example, quality management systems,

environmental systems, occupational health and safety systems in process management; • implementing process indicators and setting performance targets; • reviewing the effectiveness of the process framework in delivering the organizations

policy and strategy.

Elements Score

Attributes 0% 25% 50% 75% 100%

Sound:





as appropriate



Approach

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%

Implemented: No evidence




relevant areas

• approach is implemented Implemented in about 3/4 of

relevant areas






Deployment

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100


0% 25% 50% 75% 100%













Assessment & Review



5. Processes :

5a

Strengths

1. Operational processes are designed to fulfill QCD requirement of customer and these are documented in Quality Manual along with the KPI details. Support processes are documented in the respective manuals such as HR manual. Deployment of these processes is done through DWI and reviewed by 13 standing task forces along with the KPIs requiring updating.

2. The systems have in-built mechanisms for resolutions of interface issues. There are thirteen task forces and cross-functional teams are formed to resolve the interface issues. Employee related issues are resolved in three tier bipartite forums

3. The Unit, for systems and processes is certified for various standards viz., ISO 9001, 14001, OHSAS 18001, ISO / IEC: 27001: 2005, NABL – etc.


1. It is not clear what framework, of key processes, has been identified, designed and

communicated to all concerned to deliver its policy & strategy and enable its people to have uniform understanding across the organisation.

2. While the Unit has taken initiatives to enhance organisational capacity and capability, there is no evidence to suggest that process capability / machine capability studies are made, as applicable, and are used for bringing improvement.

3. While targets / stretch targets are set in most processes, the Unit may like to evolve a robust target setting process, taking into consideration customer / next process requirement, past performance, process capability, and benchmark and integrated with MIS for review, setting direction for process improvement and enabling the Unit towards becoming world class.

4. It is not evident how the processes, particularly support processes are controlled using related measures. DTC initiative is in early stage of deployment.



5b Processes are improved, as needed, using innovation in order to fully satisfy and generate increasing value for customers and other stakeholders

This may include :

identifying and prioritising opportunities for improvement, and other changes, both incremental and breakthrough;

•

using performance and perception results and information from learning activities to set priorities and targets for improvement and improved methods of operation;

•

• stimulating and bringing to bear the creative and innovative talents of employees, customers and partners in incremental and breakthrough improvements;

• discovering and using new process designs, operating philosophies and enabling technology;

• establishing appropriate methods for implementing change; • piloting and controlling the implementation of new or changed processes; • communicating process changes to all appropriate stakeholders; • ensuring people are trained to operate new or changed processes prior to implementation; • ensuring process changes achieve predicted results.

Elements Score

Attributes 0% 25% 50% 75% 100%

Sound:





as appropriate



Approach

Total 0 5 20 10 15 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%





relevant areas


relevant areas






Deployment

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100


0% 25% 50% 75% 100%













Assessment & Review



5. Processes :

5b

Strengths

1. Various process improvement strategies are used to achieve breakthroughs and incremental improvement. IMPRESS is the common umbrella used for various improvement initiatives such as QIPs, PIPs, JIPs and TDP etc. DTC is one of the key tools used for breakthrough changes in existing designs, materials and processes.

2. Six sigma (DMAIC) approach is used for reduction in cost, cycle time and quality improvement. LEAN approach has been adopted in SCR and Traction Division in 2007-08 and various other process improvements are implemented. RCA methodology is applied in product areas for identification of root cause and implementmethodology is applied in product areas for identification of root cause and implement preventive actions.

3. The process changes are communicated through various forums and amendments/ revisions are made in various documents. Changes affecting customers are communicated through service bulletins and suppliers are communicated through vendor meets.


1. Though improvements are being achieved in products and processes along with customers as well as suppliers, a structured approach is yet to be evolved.

2. Though number of improvement projects are taken over the years, yet it is not evident if there is a defined improvement process to identify and target specific areas of operations / processes and how it is reviewed and improved



5c Products and Services are designed and developed based on customer needs and expectations

This may include :

using market research, customer surveys and other forms of feedback to determine customer current needs and expectations for products and services;

•

anticipating and identifying improvements aimed at enhancing products and services in line with customers’, and other stakeholders, future needs and expectations;

•

designing and developing new products and services together with customers and partners that add value for the customers;

•

• understanding and anticipating the impact and potential of new technologies on products and services; developing new products and services for both the current established market and to gain access to other markets;

•

• using creativity, innovation and key competencies of both internal people and external partners to design and develop competitive products and services.

Elements Score

Attributes 0% 25% 50% 75% 100%

Sound:

• • approach has defined processes

approach has a clear rationale

• approach focuses on stakeholder needs


Evidence Clear evidence Some Evidence Comprehensive evidence


as appropriate



Approach

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%





relevant areas


relevant areas






Deployment

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100









Some evidence Comprehensive evidence

Evidence Clear evidence




Some evidence Clear evidence Comprehensive evidence

Evidence

Assessment & Review



5. Processes :

5c

Strengths

1. BHEL products are mostly designed, manufactured and delivered to meet specific customer's requirements. These requirements are then translated in the form of new/upgraded products. Product / Technical committee regularly review and finalise the new product requirements. These are also reviewed in MCM.

2. The Unit has many examples of development of products in collaboration with the customers, new technology development, product quality and value enhancement and also development of new services for customers. The effectiveness of new developments is measured through turnover from commercialisation of products, filing of Patents / copyrights and these are part of BSC measures. A booklet "Engineering Highlights" is published to disseminate the knowledge and improve the capability of the organisation

3. The Unit has developed special services to meet customer requirements. Some of these) Round the clock service for Railways in Mumbai. 2) Training package on CD for common problems of motors and OLTC 3) Computer system package for drawings transfer to customer etc.


1. Although initiatives are taken to develop the products and services, it is not evident how these are recognised to encourage creative & innovative ideas from the employees and also evaluated in terms of its technology impact.



5d Products and Services are produced, delivered and serviced

This may include :

• producing or acquiring products and services in line with designs and developments; marketing, communicating the value proposition, and selling products and services •

• to existing and potential customers; delivering products and services to customers; •

• servicing products and services, including recycling where appropriate.

Elements Score

Attributes 0% 25% 50% 75% 100%

Sound:

• •

approach has a clear rationale approach has defined processes





as appropriate



Approach

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%





relevant areas


relevant areas






Deployment

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Score Attributes

Elements 0% 25% 50% 75% 100%













Assessment & Review



5. Processes :

5d

Strengths

1. The Unit keeps its customer informed about the improvements in products through various mechanisms such as in house news letters, web site, seminars/exhibitions etc. The customer orders are sent as internal orders to respective product groups for manufacturing and delivery to the customers after joint quality checks.

2. Various tools / initiatives such as DWM, Six sigma’s, CRISP boards are used to monitor and control the process variations to reduce the defects and rework. Special task force was constituted for study of logistics requirements of customers and the transporters contract was revamped. On site fabrication facilities are also extended to customers as per requirement.

3. The service group provides the support for after sales service and gets the feedback directly or through marketing and sales. For projects, CMG and project management group take care of the sequential deliveries and project management.

4. The unit involves its customer in various stages of product manufacture, through CHP system. This participative approach of Unit is mutually beneficial has helped in better understanding of the customer needs.

1. While customers appreciate the Unit's ability to reach fast in case of any problem, delivery itself is still an issue, in spite of improvement in OTIF for Transportation and Switchgear. In the absence of data, status of OTIF is not evident for other product segments. Nor it is evident that process improvements have been brought in.


2. In the absence of data and information, it is not evident how recycling of materials, consumables and scrap is carried out.

3. It is not evident how the Unit is addressing the issue of communicating the value proposition to its potential domestic and international customers.



5e Customer relationships are managed and enhanced This may include :

• determining and meeting customers day to day contact requirements; handling feedback received from day to day contacts including complaints; • proactive involvement with customers in order to discuss and address their needs, expectations and concerns;

•

• following up on sales, servicing and other contacts in order to determine levels of satisfaction with products, services and other customer sales and servicing processes; seeking to maintain creativity and innovation in the customer sales and servicing relationship;

•

• establishing partnerships with customers which add value to the supply chain; using regular surveys, other forms of structured data gathering and data gathered during day to day customer contacts in order to determine and enhance customer relationship satisfaction levels;

•

• advising customers on the responsible use of products. Elements

Score Attributes 0% 25% 50% 75% 100%

Sound:

• •

approach has a clear rationale approach has defined processes





as appropriate



Approach

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%





relevant areas


relevant areas






Deployment

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100


0% 25% 50% 75% 100%







Some evidence • identify best practice and improvement opportunities

Evidence Clear evidence Comprehensive evidence





Assessment & Review



5. Processes :

5e

Strengths

1. At BHEL, customers' day-to-day contract requirements are met through company's various offices and establishments located countrywide. These are service centres, RODs, Repair shops, Power sectors, Industry sector, and IOD and customer offices in BHEL premises.


1. Even though it is stated that the Unit has a practice of senior management members paying non agenda visits to customers, it is not evident how many such visits are made to customers, by whom and what is the value addition to customer relationship management.

2. It is not apparent how creativity and innovation approach is used in customer sales and servicing relationship.

3. The Unit has structured customer perception survey conducted since the year 2000. However, it is not evident as to what are the progressive improvements made in its methodology, in terms of coverage (sample size and spread) and attributes. Perceptions are not captured on important aspects like image and loyalty. This may be helpful in strengthening customer relationship management.

2. The Unit has established many avenues to enhance customer relationships, such as: pre and post contract reviews, Pre-award meetings, Contract execution review, Routine inspection, and Complaints resolution and customer trainings. Through these avenues the unit, has been able to strengthen the bond with them.

3. The Unit has a structured approach of capturing customer perceptions through survey. Initiated in 2000, it is carried out every alternate year through an external professional agency. Survey findings are suitably acted upon to improve customer perceptions.

4. Service staff handles customer complaints and Service Cells carry out the trend analysis of complaints. These are further taken up with concerned departments for suitable remedial measures.


6. Customer Results : What Excellent organisations comprehensively measure and achieve outstanding results with respect to their customers..

6a Perception Measures

These measures are of the customers’ perceptions of the organisation (obtained, for example, from customer surveys, focus groups, vendor ratings, compliments and complaints).

Depending on the purpose of the organization examples of measures that may be made include:

• Image: Sales and after sales support: • – capabilities and behaviour of employees; – accessibility; – advice and support; – communication; – customer literature and technical

documentation; – transparency; – flexibility;

•

– handling complaints; – pro-active behaviour; – product training; – responsiveness. – response time; Products and services: – technical support; – quality; – warranty and guarantee provisions. – value;

• Loyalty: – reliability; – design innovation; – intention to repurchase; – delivery; – willingness to purchase other products and

services from the organisation; – environmental profile. – willingness to recommend the organisation.

Elements Score

Attributes 0% 25% 50% 75% 100%

Trends: No results or

anecdotal information

Positive trends an/or satisfactory performance for

about ¼ of results over at least 3 years

Positive trends an/or sustained

good performance for about 1/2 of

results over at least 3 years


good performance for about ¾ of results over at least 3 years

Positive trends and/or sustained good performance

for all results over at least 3 years

• trends are positive and/or • there is sustained good

performance

Targets: •

• targets are appropriatetargets are achieved

No results or


Achieved and appropriate for

about ¼ of results


about ½ of results


about ¾ of results

Achieved and appropriate for all

results Comparisons: • results compare well with others

and/or • results compare well with

acknowledge ‘World Class’


information

Favourable comparisons for about ¼ results

Favourable comparisons for about ½ results

Favourable comparisons for about ¾ results

Favourable comparisons for all

results

Causes:

Results

• results are caused by approach No results or anecdotal

information

Cause and effect visible for about ¼

results

Cause and effect visible for about ½

results

Cause and effect visible for about ¾

results

Cause and effect visible for all results

Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%

Scope: • results address relevant areas • results are appropriately

segmented e.g. by customer, by business


information

Results address ¼ of relevant areas and

activities

Results address ½ of relevant areas and

activities

Results address ¾ of relevant areas and

activities

Results address all of relevant areas and

activities

Results



6. Customer Results :

6a

Strengths

1. The Unit has received customer accolades and the customer satisfaction index is improving, over the years in most of the attributes. Product wise CSI has also been improving and is more than the target set.

2. Segment wise analysis of CSI shows that CSI has significantly improved over last time (2005) in two segments viz. Switchgear, control gear & rectifier and Transportation, backed up by Internal Customer Feedback.

3. Customer accolades appreciate import substitution efforts, improvement in supply position and customer training provided.

4. The results related to perceptions on warranty and guarantee provisions, willingness to recommend the organisation and capability and behaviour of employees are better than competition in 2007 survey.


1. The results of perception measures related to image in terms of flexibility, transparency, proactive behavior and responsiveness are lower than the competition (2007). C&E analysis not available.

2. Results on CS through Customer Audit, Executive visits, Customer Meets are not presented.

3. Customer perception data for overseas customers are not available.


6. Customer Results : What Excellent organisations comprehensively measure and achieve outstanding results with respect to their customers.

6b Performance Indicators

These measures are the internal ones used by the organisation in order to monitor, understand, predict and improve the performance of the organisation and to predict perceptions of its external customers.


• Image: – number of customer accolades and

nominations for awards; – press coverage.

• Products and services: – competitiveness; – defect, error and rejection rates; – seals of approval, environmental

labels; – guarantee provisions and warranty

provisions; – complaints; – logistic indicators; – product life cycle; – innovation in design; – time to market.

• Sales and after sales support:

• Loyalty: – duration of relationship;

Attributes 50%

– demand for training; – handling of complaints; – response rates.

– effective recommendations; – frequency/value of orders; – lifetime value; – numbers of complaints and

compliments; – new and/or lost business; – customer retention.

Elements Score

0% 25% 75% 100%

Trends: • trends are positive and/or • there is sustained good

performance


information










Targets: •

•

targets are achieved targets are appropriate


information


about ¼ of results


about ½ of results


about ¾ of results






information





results

Causes:

Results


information


results


results


results


Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%




information


activities


activities


activities


activities

Results



6. Customer Results :

6b

Strengths 1. The failure rate of Generator Transformers in operation at customer end has come down to

zero over the years and BHEL Bhopal has attained ‘best in class’ benchmark in Test Acceptance rates. Repeat business and new business have been improving over the years in all products. BHEL Bhopal has relationship with many customers for more than 15 to 45 yrs.

2. The results pertaining to competitiveness, defect, error and rejection rates, guarantee provisions & warranty provisions, product life cycle are showing positive trend.


1. Though delivery performance trend is showing improvement, it is still lower vis-à-vis the competition. Not evident what actions have been taken or planned?


7. People Results : Excellent organisations comprehensively measure and achieve outstanding results with respect to their people

7a Perception Measures

These measures are of the people’s perception of the organisation (obtained, for example, from surveys, focus groups, interviews, structured appraisals).


• Satisfaction • Motivation – organisation’s administration; – career development; – employment conditions; – communication;

– empowerment; – facilities and services; – health and safety conditions; – equal opportunities; – job security; – involvement; – pay and benefits; – leadership; – peer relationships; – opportunity to learn and achieve; – the management of change; – recognition; – the organisation’s environmental

policy and impact; – target setting and appraisal; – the organisation’s values, mission,

– the organisation’s role in the community and society;

– vision, policy and strategy; – training and development.

– working environment.

Elements Score

Attributes 0% 25% 50% 75% 100%


performance


information










Targets: • targets are achieved • targets are appropriate


information


about ¼ of results


about ½ of results


about ¾ of results






information





results

Causes:

Results


information


results


results


results


Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%




information


activities


activities


activities


activities

Results



7. People Results :

7a

Strengths

1. Feedback results through employee perception survey show that Average Merit Score is showing improving trend for workmen. Overall AMS for various attributes have improved over the years.

2. The score on Leadership Index conducted during 2005 and 2007 has been higher than the previous survey. BHEL has been recognised as Star PSU Company by Business Standards in March'07 and 3rd Best Company by Business world.


1. People perception results pertaining to empowerment, satisfaction scores related to employment conditions, facilities and services, health and safety conditions, pay benefits, peer relationships, management of change, job security are not presented.

2. The satisfaction index of supervisors and executives has marginally dropped in last three surveys, for all attributes except training and retraining. Index for supervisors in the dipstick survey on HR initiatives is also low compared to workers and executives.

3. The Unit has not presented comparative results of employee perceptions w.r.t. Other BHEL units.


7. People Results: Excellent organisations comprehensively measure and achieve outstanding results with respect to their people


These measures are the internal ones used by the organisation in order to monitor, understand, predict and improve the performance of the organisation’s people and to predict their perceptions.


• Satisfaction: • Achievements: – absenteeism and sickness levels; – Competency requirements versus

competencies available; – accident levels; – grievances; – Productivity; – recruitment trends; – success rates of training and

development to meet objectives; – staff turnover and loyalty; – strikes; – external awards and recognition. – use of organisation provided

facilities and benefits. • Motivation and involvement:

– involvement in improvement teams; – Services provided to the

organisation’s people: – involvement in suggestion schemes; – accuracy of personnel

administration; – levels of training and development; – communication effectiveness; – measurable benefits of team work; – speed of response to enquiries; – recognition of individuals and

teams; – training evaluation. – response rates to people surveys.

Elements Score

Attributes 0% 25% 50% 75% 100%


performance


information












information


about ¼ of results


about ½ of results


about ¾ of results






information





results

Causes:

Results


information


results


results


results


Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%




information


activities


activities


activities


activities

Results



7. People Results :

7b

Strengths

1. The training mandays / employee have been improving over the years. The cumulative mandays for multiskilling training is going up over the years. The investment in training has been increasing and number of employee sent abroad for training has also been going up.

2. Employees have been awarded the national recognition on individual basis and the number of persons awarded as Swasth Karamchari has been going up. The employee involvement in suggestion schemes, Quality circles and PIPs is increasing over the years. Quality Circles have received accolades in various competitions.

3. There is a substantial rise in 2007-08 in no. of cases of job rotation for workers, supervisors, and executives, 266 against 104 in 2006-07 indicating efforts towards people development by enriching them through varied work experience and exposure.


1. The results for indicators related to competency requirement v/s available, success rate of training, measurement of training effectiveness, absenteeism and sickness levels, communication effectiveness, training evaluation and speed of response to enquiries are not indicated.


8. Society Results: Excellent organisations comprehensively measure and achieve outstanding results with respect to society.

8a Perception Measures These measures are of the society’s perception of the organisation (obtained, for example, from surveys, reports, press articles, public meetings, public representatives, governmental authorities). Some of the measures contained in the guidance for Perception Measures may be applicable to Performance Indicators and vice versa.


– support for sport and leisure; – voluntary work and philanthropy.

• Image: – responsiveness to contacts;

• Reduction and prevention of nuisance and harm from its operations and/or throughout the lifecycle of its products and services:

– as an employer; – as a responsible member of the community. • Performance as a responsible citizen:

– health risks and accidents; – disclosures of information relevant to the community; – noise and odour;

– hazards (safety); – equal opportunities practices; – pollution and toxic emission; – impact on local regional, national and global

economies; – analysis of the supply chain; – environmental performance evaluation/lifecycle

evaluation. – relationships with relevant authorities; – ethical behaviour.

• Reporting on activities to assist in the preservation and sustainability of resources:

• Involvement in the communities where it operates:

– choice of transport; – involvement in education and training; – ecological impact; – involvement of community bodies in relevant

activities; – reduction and elimination of waste and packaging; – support for medical and welfare provision;

– substitution of raw materials or other inputs; – usage of utilities e.g. gases, water, electricity, – recycling

Elements Score

Attributes 0% 25% 50% 75% 100%

Trends: • trends are positive and/or • there is sustained good performance

No results or anecdotal information

Positive trends an/or satisfactory

performance for about ¼ of results over at

least 3 years

Positive trends an/or sustained good

performance for about 1/2 of results over at

least 3 years

Positive trends an/or sustained good

performance for about ¾ of results over at

least 3 years

Positive trends and/or sustained good

performance for all results over at least 3

years Targets: • targets are achieved • targets are appropriate


Achieved and appropriate for about

¼ of results


½ of results


¾ of results






Favourable comparisons for about

¼ results


½ results


¾ results


results

Causes:

Results


• results are caused by approach Cause and effect visible for about ¼

results


results


results


Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%

Scope: • results address relevant areas • results are appropriately segmented

e.g. by customer, by business



activities


activities


activities


activities

Results



8. Society Results :

8a

Strengths

1. The positive remarks made by the eminent social personalities provide perception about the company's image towards social responsibilities. Results of society perception survey show improvement in overall score.


1. The results related to perception measures such as ethical behaviour, involvement in

education and training, support for sports and leisure, voluntary work and philanthropy are not indicated.


8. Society Results : Excellent organisations comprehensively measure and achieve outstanding results with respect to society.


These measures are the internal ones used by the organisation in order to monitor, understand, predict and improve the performance of the organisation and to predict perceptions of society.

Depending on the purpose of the organisation examples of measures that may be made include:

• Handling changes in employment levels; • Dealings with authorities on issues such as:

– certification; – clearances; – import/export; – planning; – product release.

• Accolades and awards received. – Exchange of information in relation to Social Responsibility good practices, auditing

and social reporting.

Elements

Score Attributes

0% 25% 50% 75% 100%






performance








Targets: •

•



information


about ¼ of results


about ½ of results


about ¾ of results



and/or Favourable

comparisons for all results


information



Favourable comparisons for about ¾ results • results compare well with

acknowledge ‘World Class’ Causes:

Results

• results are caused by approach Cause and effect visible for about ¼

results


results


information


results


Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%




information


activities


activities


activities


activities

Results



8. Society Results :

8b

Strengths

1. There had been continuous increase in expenditure on welfare measures by BHEL Bhopal, which is the highest in comparison to other units. The unit provides support for charity, welfare education, training & leisure and welfare to the community.

2. Besides social welfare activities, the unit supports society by providing medical facilities like Kasturba hospital, Yoga research centre and training programmes, internet site ' Health care online ‘ etc. and carrying out activities like health clinics, health camps, special camps on days like TB day. WHO day, Blood donation day -- etc. The unit also conducts various health awareness programmes on Diabetes, Epilepsy, Alzimers, AIDS, Nutrition, Tobacco hazards -- etc.

3. BHEL has taken many initiatives towards improving the Environment, Ecology and safety. Continuous monitoring of Air and Stack Emission keep these much below the statutory norms. There are initiatives taken towards local employment and local economy and conservation of Natural resources and Energy conservation. BHEL has been awarded as Star Public Sector Company in 2006, second best award for women development activities and Udyog Ratna award by chief minister apart from individual accolades.


1. The results pertaining to dealing with authorities on issues such as certification, clearances, import/export, and planning product release are not indicated. This may be important for achieving the mission of becoming an Indian multinational enterprise.

2. Though the unit has many societal approaches and initiatives, these have not been compared with any other organisation's such approaches so as to compare and bring about improvements in its efforts.


9. Key Performance Results : Excellent organisations comprehensively measure and achieve outstanding results with respect to the key elements of their policy and strategy.

9a Key Performance Outcomes

These measures are key results defined by the organisation and agreed in their policy and strategies.

Depending on the purpose and objectives of the organisation some of the measures contained in the guidance for Key Performance Outcomes may be applicable to Key Performance Indicators and vice versa:

• Financial outcomes may include – Market related and general data (sales, share price, dividends etc); – Profitability (gross margins, earnings per share, earnings before interest and tax,

contribution margin etc); – Investment and asset related information (Return on invested capital, Return on net

assets, Return on capital employed etc); – Budgetary Performance (Performance against organisation or unit budgets).

Non-Financial outcomes may include: •

– Market Share; – Time to market; – Success rates; – Volumes; – Process performance.

Elements Score

Attributes 0% 25% 50% 75% 100%













performance

Targets: •

•



information


about ¼ of results


about ½ of results


about ¾ of results


results Comparisons: • No results or




results

results compare well with others and/or

• results compare well with acknowledge ‘World Class’



Causes:

Results


information


results


results


results


Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%




information


activities


activities


activities


activities

Results



9. Key Performance Results :

9a

Strengths

1. There are positive trends in the financial indicators such as Profit / Sales, Turnover, Quarterly turnover, PBT, Gross Margin as % of Turnover, Current Ratio. The value added as % of TO have been improving over the years, being 2nd best in BHEL group. New product TO as % of total TO is highest in last 5 years. The inventory has been coming down in no. of days of turnover and is lowest among BHEL Units.

2. BSC Score is improving and is above 95% for all the groups in the Unit.

3. The Unit is having sustained market leadership in its most product range. TO has also been improving as indicated in addressing most of the products.

3. No comparison with the competitors for many performance results.


1. No result data provided on process performance, time to market, success rate related to marketing efforts. No marketing results data related to export was available.

2. While the Unit has number of product segments as well as market segments, segmented results are not being compiled and used for identifying opportunities for improvement in specific segments.


9. Key Performance Results : Excellent organisations comprehensively measure and achieve outstanding results with respect to the key elements of their policy and strategy.

9b Key Performance Indicators

These measures are the operational ones used in order to monitor and understand the processes and predict and improve the organisation’s likely key performance outcomes.

Depending on the purpose of the organisation examples of measures that may be made include;

• Financial: – Cash flow – Depreciation; – Maintenance costs; – Project costs; – Credit ratings.

Non Financial: • – Processes (performance; assessments; innovations; cycle times); – External resources including partnerships (supplier performance: supplier price; number and

value added of partnerships; number and value added of joint improvements with partners); – Buildings, equipment and materials: (defect rates; inventory turnover; utilisation); – Technology: (innovation rate; value of intellectual property; patents; royalties); – Information and knowledge: (accessibility; integrity; value of intellectual capital) – number and value added of partnerships; – number and value added of innovative products and services solutions generated by

partners;

Elements Score

Attributes 0% 25% 50% 75% 100%


performance


information












information


about ¼ of results


about ½ of results


about ¾ of results






information





results

Causes:

Results


information


results


results


results


Total 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Elements Score

Attributes 0% 25% 50% 75% 100%




information


activities


activities


activities


activities

Results



9. Key Performance Results :

9b

Strengths

1. There are improving trends in case of reduction in cycle time for Engineering, Product cycle time, rework, % weld defects. There has been improvement in EVA, Value added and turnover / employee, net cash flow and cash collection. The working capital in days of turnover has come down and achieved lower interest and drop in debtors.

2. Cost reduction has been achieved through cost reduction in material and personnel payments. Six-sigma, DTC and Lean have resulted in improving productivity and OTIF and reduction in defect rate and inventory.

3. There had been reduction in energy consumption, Power, Fuel expenses. Savings through suggestions and Quality circle have been improving. R&D expenditure show upward trend including the commercialisation and indigenisation. No. of patents filed have been going up.

4. There had been improvement in provision of IT resources over the years, increase in number of drawings generated using AUTO CAD.


1. No result data available on performance of various Key and Support Processes in terms of process indicators.

2. No targets, benchmarks and competitive data are given in the results for most of the parameters, which could help the Unit in identifying the opportunities for improvement.
